Employment Law Update - May 2017
In this update we will take a look at what has been happening recently in the area of Employment Law. April is often a big month for change and this year is no exception. At this time of year there are lots of updates landing in our inboxes and it is hard to keep track of everything that is happening. To make sure you are up to speed with recent changes, here are the headlines:
Apprenticeship levy
The government target for new apprenticeships is three million by 2020 and the apprenticeship levy was introduced as a means of funding this initiative. There are also some implications for the way apprenticeships are organised, shifting responsibility on to employers. Employers in England with a pay bill of £3m or more will pay 0.5 per cent of their monthly payroll as a levy via PAYE.
Limited salary sacrifice tax advantages
Salary sacrifice arrangements are popular for many employee benefits but that is likely to change as the tax and national insurance contribution advantages of many such arrangements cease. Company cars, private health schemes and health screening checks, gym memberships, mobile phone contracts, computers, and school fees are among the benefits-in-kind that must be taxed through payroll from 6 April.
Note: certain transitional arrangements exist for schemes already in place before April 2017. These are protected until April 2018 or April 2021 in some cases. Pension contributions and advice, childcare, cycle-to-work schemes and ultra-low emission vehicles remain exempt from tax.
Minimum wage increases
The minimum wage for those aged 25 and over rose from £7.20 per hour to £7.50 on 6 April – an increase of 4.2 per cent. The minimum wage for other age groups are as follows: 21 to 24-year-olds increased to £7.05 an hour, 18 to 20-year-olds to £5.60 an hour, 16 to 17-year-olds to £4.05, and the apprentice rate has risen from £3.40 to £3.50.
Gender pay reporting
A feature of our most recent employment law update and a long time under consultation: gender pay gap reporting is finally here.
In summary, organisations with 250 or more employees will be required to publish the difference between mean and median hourly pay of full-time male and female staff, as well as the difference between mean and median bonus pay for male and female employees, and the proportions of men and women awarded bonuses.
Private and voluntary sector firms are required to base their data on staff employed on a ‘snapshot’ date of 5 April, while public sector organisations must use 31 March. Employers then have 12 months to publish the information on their website and a government website.
Statutory family-related, redundancy and sick pay
New limits on statutory redundancy pay came into force on 6 April; employers making redundancies must pay those with two years’ service an amount based on their weekly pay, length of service and age. Qualifying weekly pay has risen by £10, to £489.
The weekly rate of statutory sick pay increased to £89.35 from 6 April. To be entitled to these payments, employees’ average earnings must be equal to or greater than the lower earnings limit, which is rising to £113.
Statutory maternity, paternity, adoption and shared parental pay has risen to £140.98 for weeks commencing on or after 2 April. These rates will reduce to 90 per cent of an employee’s earnings if this is lower than the statutory rate.
Immigration skills charge
Brexit is highly likely to affect the nature of skilled migration, and this change may be significant for employers. Businesses sponsoring skilled workers under tier 2 of the immigration points-based system will have to pay an annual levy of £1,000 per certificate of sponsorship from 6 April. A fee of £364 will apply to small employers and charities. The salary threshold for the tier is also due to increase to £30,000 for migrants who are ‘experienced workers’.
Reformed IR35
Changes to the IR35 tax system from 6 April 2017: the public sector employers must deduct tax and NICs from contractors’ pay at source, rather than allowing them to defer and claim expenses.
The reforms affect central and local government, the armed forces, the police, the NHS and others. Potentially some will prefer to work in the private sector; others will charge increased day rates. But HMRC is likely to be watching closely.
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Some exciting news
cHRyos HR are pleased to announce that they are now approved to deliver Apprenticeships in Team Leader/Supervisor (Level 3) and Operational/Departmental Manager (Level 5). These programmes will be linked to our CMI qualifications. We are also approved to be an End Point Assessment organisation for the same Apprenticeship standards. Please get in touch if you require more information.
Services for SME’s
At cHRysos HR we have experienced HR consultants who have worked in a wide range of business sectors and types of organisation. They have extensive knowledge and experience in employment law and best practice in managing people.
If you require any guidance and support please get in touch with us by email at info@chrysos.org.uk or Telephone 01302 802128.
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cHRysos HR Solutions are a UK wide HR training and consultancy company offering CIPD accredited qualifications, Apprenticeships, Training and HR Services to SMEs. For more information about how cHRysos HR can help you or your teams successfully achieve further qualifications, contact us on info@chrysos.org.uk or call 03300 562443.