This year a number of key employment law changes will impact on UK companies. Many of these changes are coming into force in April 2017, so it’s essential that business owners start preparing now, particularly where the change involves the collation of additional data or increased costs.
Gender pay gap reporting requirements introduced
For the first time, organisations with 250 or more employees will be required to publish their gender pay gap information. This includes their mean and median gender pay and gender bonus-pay gaps, as well as information on the proportion of men and women receiving a bonus payment.
Employers need to base their first report on the pay period in which 5 April 2017 falls, while the required bonus information should take into account the 12 months leading up to this date.
The first report is due by April 2018, and must be published in English on a company website that is accessible to employees and the public.
National minimum wage increase cycle changed
The national minimum wage cycle is being aligned from 2017, so that increases for all age groups take place in April rather than October.
This is in line with the introduction of the national living wage – the minimum wage rate for workers aged 25 and over – in April 2016. While the rates for the lower age groups have traditionally increased on 1 October each year, this will now change to 1 April. The alignment will mean a further increase on 1 April 2017 for workers below the age of 25, on top of their October 2016 increase.
General Data Protection regulation is on the horizon
The General Data Protection Regulation (GDPR) is the new governing legislation for collecting and processing personal data in the EU. Although it does not come into force until May 2018, the scope of the changes under the GDPR means that preparing for it will be a high priority for UK employers in 2017.
In addition to changes to how employers collate and handle data, the GDPR creates a new enforcement system, with significantly higher maximum penalties than under the current Data Protection Act. Organisations breaching their obligations under the GDPR risk fines of up to €20 million or 4 per cent of annual worldwide turnover, whichever is higher.
Apprenticeship levy introduced
The government is changing the way it funds apprenticeships. Employers with an annual paybill of more than £3m will be required to pay a 0.5 per cent levy on this, starting on 6 April 2017. Large employers will be able to access levied amounts, plus a government top-up of 10 per cent, to fund apprenticeships from accredited training providers.
Smaller organisations that are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10 per cent towards the cost of an apprenticeship, with the government paying the remaining cost.
Changes to rules for employing foreign workers
A new “skills charge” of £1,000 per worker is set to be introduced in April 2017 for employers sponsoring foreign workers with a tier two visa.
The intention behind the new charge – which will be in addition to the current fees for visa applications – is to encourage businesses to recruit and train UK employees and reduce their reliance on migrant workers. The minimum salary threshold for “experienced workers” applying for a tier two visa is also expected to increase to £30,000.
These five employment changes should be high on the agenda for all business owners to ensure they don’t miss key deadlines and that their business is fully compliant.
About the author
Joanna Stubbs is head of content at XpertHR Group. XpertHR provides advice and guidance for employers to ensure they keep on top of employment law issues – including new requirements – as well as HR policy issues.