Introduction of the Apprenticeship Levy

Came in to effect: Thursday 6th April 2017             

Introduced to encourage employers to invest in apprenticeship programmes – large employers with a wage bill of more than £3 million per annum will need to pay a levy of 0.5% of their payroll (though each employer gets an allowance of £15,000 to offset against the amount they owe).

Large employers will be able to access “levied amounts” and will also have access to a government 10% top up to fund apprenticeships from accredited providers. Smaller organisations, although not required to pay the levy, will also be able to access government funding to pay 90% of the cost of the accredited apprenticeships by making a 10% contribution themselves.

Trade Union ballot changes

Most of the Act’s changes apply to ballots opening on or after 1 March 2017

Other changes relating to the “Certification Officer”, “facility time reporting” and “check-off provisions” have a phased implementation during 2017 and 2018.                                                 

The Trade Union Act 2016 changes to balloting are awaiting launch and would require a minimum 50% turnout and a majority vote in favour of industrial action in order to be able to activate a strike.

For public services listed as “important” there will be a requirement for a strike vote of 40% of all eligible voters.

Pensions Advice Allowance introduced

Came in to effect: 6th April 2017

Members of defined-contribution and hybrid pension schemes will be able to take a tax-free amount of £500 from their scheme, to be redeemed against the expense of financial advice.

The allowance is expected to take effect from 6 April 2017.

The value of pensions advice provided by employers on which there is tax and NIC relief will increase from £150 to £500.

Statutory payment increase: Redundancy

Came in to effect: 6th April 2017

Redundancy pay applies to those dismissed for redundancy with over two years’ service. A weeks’ pay is used in the calculations but is capped.  It is the capped amount that is being increased:

From 6th April 2017 this increased to £489, (formerly) £479.

Gender pay gap reporting

Came in to effect: April 2017

Applicable to employers with over 250 employees. From April 2017, employers will have 12 months to publish their gender pay gap information (first date to publish is currently aimed to be 4th April 2018).  Employers will need to present data showing a breakdown of both men and women’s pay for each quartile of their overall salary range.

Salary Sacrifice Schemes Restricted

Came in to effect: 6th April 2017

We advise employers to review the benefits offered to employees through salary-sacrifice schemes as although schemes linked to childcare vouchers, cycle to work schemes and pension savings will not be affected, schemes relating to cars (none low emission), accommodation and school fees will only be protected until April 2018.

Rules for Employing Foreign Workers

Came in to effect: April 2017

Tier 2 visa sponsorship will require employers to pay an immigration skills charge of £1,000 per worker (£364 for small employers and charities) beginning in April 2017. The skills charge will be in addition to current fees for visa applications.  Experienced Workers being sponsored through Tier 2 application will also be required to meet a minimum salary threshold of £30,000 per annum.   Exemptions will apply until 2019 for some health and education staff.

2018 – What’s coming..?

Tax on Termination Payments

Comes in to effect April 2018

Tax change details: Currently, contractual PILONs are taxable whereas non-contractual PILONs are not. The distinction is to be removed with all PILONs attracting tax and NI deductions. As well as notice payments, any other post-employment payments (such as expected bonus income) that would have been treated as earnings if the employee had received them during the notice period will be taxed. This will apply even if the employee does not work out any or all of the notice period.

Termination payment up to £30k still tax-free. Currently they are also NI-free regardless of amount. From April 2018, tax and employer NI requirements for termination payments over £30k to be aligned (so employer NI will be payable on any amount over £30k) but no employee NI payment required.

Ability to restrict access to employment allowance

Comes in to effect April 2018

The government plans to introduce a further deterrent to the employment of illegal workers. From April 2018, employers will not be able to claim the Employment Allowance for one year if they have:

  • hired an illegal worker
  • been penalised by the Home Office
  • exhausted all appeal rights against that penalty.Employment Allowance. Since 6 April 2014 some employers have been able to claim the ‘Employment Allowance’ to reduce their employer Class 1 National Insurance contributions (Employers NICs). For the tax years 2014-15 and 2015-16 the allowance was £2000 and for 2016-17 and 2017-18 the allowance is £3000.

Wage rate changes all take place in April Change:

Comes in to effect: 1st April 2018

A consultation containing draft regulations closed in January 2017.

  • Apprentice                          –              £3.70 p/hr
  • 16 -17yrs                              –              £4.20 p/hr
  • 18 – 20yrs                             –              £5.90 p/hr
  • 21 – 24yrs                            –              £7.38 p/hr
  • 25+yrs                                   –              £7.83 p/hr

Statutory payment increase: Sick pay and family related payments

Comes in to effect April 2018

  • Statutory maternity, paternity, adoption and shared parental pay – increase to £145.18
  • Statutory sick pay to increase to £92.05
  • Lower Earnings Limit (LEL) – to increase to £116Comes in to effect 25th May 2018
  • General Data Protection Regulations
  • Private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish information about the differences in pay between men and women in their workforce, based on a pay bill ‘snapshot’ date of 5 April 2017, under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. The first reports must be published by 4 April 2018.
  • Similar reporting requirements apply to larger public sector employers from 31 March 2017 and the first reports are due by 30 March 2018.
  • Provisions under the Northern Irish Employment Act 2016 mirror these, except they also include fines of up to £5,000 for non-compliance, and a requirement to report on ethnicity and disability pay gaps, as well as gender.

Other interesting bits….

  • January 2018 – First reading of new Immigration Bill expected
  • 6 April 2018 – Childcare voucher scheme closes to new entrants.
  • 25 May 2018 – EU data protection package comes into force.
  • 2018BEIS scheduled to have reviewed Parental Leave regulations.
  • BIS (now BEIS) scheduled to have reviewed Shared Parental Leave regulations.
  • 2019BEIS scheduled to have reviewed the Flexible Working regulations
  • BEIS scheduled to have reviewed the early conciliation scheme.

If you have any issues surrounding this subject please do not hesitate to contact:

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