By Ben Stanton
Employment Partner
Franklins Solicitors
BEN Franklin said there are only two certainties in this life; death and taxes. Ben Stanton of Franklins adds a third; ‘and annual changes to employment law.’ This April was no different and we saw a number of significant changes of which both employers and employees should be aware. The following changes took effect in April:
Gender Pay Gap Reporting
For the first time, employers with more than 250 staff were required to publish the difference in pay and bonuses between men and women by no later than 4 April 2018. 10,014 firms provided details of their gender pay gap which showed that:
* 14 per cent of companies pay women more than men. 78 per cent pay men more.
* Women have been paid a median hourly rate that, on average, was 9.7 per cent less than that given to their male colleagues.
* The public sector showed nine in 10 paid men more than women, with an overall gender pay gap of 14 per cent.
* Construction and finance firms reported the widest pay gaps, but all sectors have a pay gap in favour of men.
* 1,557 firms missed the deadline and could face an unlimited fine. 238 companies that did not need to publish their data did so voluntarily.
The data is not perfect and does not address the gap in similar job roles or the impact of working flexible or part-time hours. Further, due to allowed exceptions in the legislation, categories of persons such as high-level executives, partners and workers on zero-hour contracts, did not have to be included in the data. The very highest and the very lowest paid workers could, therefore, be excluded from the findings. Nonetheless, it is impressive that the UK is the only country to have imposed this requirement on companies, the data of which does reveal that there are still some barriers to progression within a firm for female workers and some remaining inequality of opportunity.
Notice payments now to be taxed
Historically, if an employer wanted to make a payment in lieu of notice to an employee, they could pay this free of tax if it was deemed to be non-contractual (if it was not written in to the contract of employment or implied through prior custom and practice). However, Section 5 of the Finance (No.2) Act 2017 now confirms that all payments made to an employee in lieu of their notice will have to be taxed. HMRC’s aim was to both clarify the law and ensure that it would always receive the applicable tax, although this decision subsequently removes the tax-saving incentives for both employers and employees to be paid in this manner.
Increase in tribunal claims and payments
Since the abolition of fees in July 2017, Employment Tribunals have reported a surge in new claims, a 90 per cent increase between October to December 2017. The Employment Rights (Increase of Limits) Order 2018 increases the maximum Unfair Dismissal Compensatory Award that can be awarded by a tribunal from £80,541 to £83,682. The removal of an often preventative tribunal fee, and the obvious increase in claims being brought, makes it particularly important for employers to seek legal advice at an early stage to prevent any issues escalating into a tribunal claim.
Minimum Wage increases
The National Minimum Wage (Amendment) Regulations 2018 has confirmed the increased payments to be received by workers, including the Living Wage which is paid to workers from the age of 25 and over: the changes see the Living Wage rise from £7.50 an hour to £7.83; for 21 to 24-year-olds from £7.05 to £7.38; for 18 to 20-year-olds from £5.60 to £5.90; for under 18s from £4.05 to £4.20 and for apprentices from £3.50 to £3.70.
In March 2018, 179 employers were named and shamed for failing to pay their staff National Minimum Wage. Among these were the restaurant chains Wagamama and TGI Fridays, and the Premiership Football Club Stoke City, who variously blamed their failure on misunderstandings and accounting errors. Even the biggest employers can fall foul of this legislation.
Redundancy Payments
The limit on a week’s pay for the purposes of calculating statutory redundancy payments has increased from £489 to £508.
If you would like further information about these or any other employment issues please contact Ben Stanton, Employment Partner at Franklins Solicitors LLP at , 01604 828282 or via the website www.franklins-sols.co.uk
