December 14th, 2016 / Insight posted in Blog

Changes to employment law you should be aware of in 2017

Gender Pay Gap Reporting

Organisations with more than 250 employees will have to publish data showing their gender pay gap between male and female employees on their organisation’s website before 30 April 2018, with an initial “snapshot” of data having to be provided by 30 April 2017. Both the mean and median pay for men and women will need to be published, but does not need to be broken down by variables such as job type or grade, location, or by full/part time employees. It will have to include maternity and sick pay, bonuses, shift premium pay and area allowances, but does not include variable elements such as overtime and expenses.

The data will need to include the number of men and women in each salary quartile, to reveal any pay gaps linked to seniority but additional narrative can be given to the pay figures reported on.

Apprenticeship Levy

The government is keen to increase the number of apprentices to 3 million by 2020 with a view to reducing skills gaps, increasing youth employment and boosting productivity. If any company (including Limited Liability Partnerships) has an annual wage bill of more than £3 million in the previous tax year (2015/16), they are liable to pay a levy of 0.5% of the total in 2017. This is in addition to any agreement a company may have with other bodies. The company must calculate the levy in April 2017 and then declare and start paying the required amount, on a monthly basis, in their usual PAYE payment to HMRC in May 2017, alongside tax and NI. Once declared, companies can get access to funding for apprenticeships and are entitled to receive an annual allowance of £15,000 paid monthly, to be used within 18 months of funding and can only be used on actual training and not towards salaries.

Changes to Salary Sacrifice

As of April 2017, the number of salary sacrifice schemes will be reduced. If your business offers any of the following salary sacrifice schemes, these will remain unaffected by changes and the benefits below will continue to be provided under a tax and NI efficient salary sacrifice scheme.

  • Childcare vouchers
  • Employer pension contributions
  • Cycle to work schemes

However, any other salary sacrifice scheme offered will be treated as receiving a benefit equal to either the amount of salary that has been sacrificed or the P11D value of the benefit (whichever is greater).

New Immigration Laws

Non-EU migrant workers must now earn a minimum of £35,000 from a single job role per annum to be eligible to apply to settle in the UK. The Act introduces tougher sanctions on employers for breaches in immigration rules, increasing the maximum custodial sentence from two to five years.

Further, it introduces a new power to close premises for up to 48 hours where a business employs illegal migrants. If the employer can prove that it has conducted the appropriate checks, the “closure notice” may be cancelled. Courts can now hold individual Directors, Managers or Officers accountable for knowingly employing illegal migrant workers, and has the power to impose fines of up to £20,000 on the individual.

National Minimum and National Living Wage

Statutory minimums will increase effective from 1 April 2017, as below:

  • 25 years and older at £7.50 per hour
  • 21-24 years old at £7.05 per hour
  • 18-20 years old at £5.60 per hour
  • 16-17 years old at £4.05 per hour
  • Apprentices under the age of 19 at £3.50 per hour