Employers and HR advisers may be familiar with April bringing employment law updates and an annual increase to certain payments and compensation caps. April 2017 brings several of the usual changes together with the introduction of Gender Pay Gap Reporting and the Apprenticeship Levy.
The following is a summary of some of the key changes and the effective dates:
1.National minimum wage and national living wage increases
From 1st April 2017 national minimum wages will increase as follows:
Employee National Minimum Wage from 1st April 2017
Workers aged 25 and over £7.50 per hour
Workers aged 21 to 24 £7.05 per hour
Workers aged 18 to 20 £5.60 per hour
Workers aged 16 or 17 £4.05 per hour
Apprentices under 19 or 19+ but in first £3.50 per hour
year of apprenticeship
Accommodation offset limit will also increase to £6.40 a day
For more information on the National Minimum Wage please see our separate article on the subject.
2.Increased statutory maternity and paternity pay
From 2nd April 2017 statutory maternity pay, statutory paternity pay, statutory adoption pay and shared parental pay will increase to £140.98 a week (or 90% of average earnings if that is lower).
3.Increased statutory sick pay
From 6th April 2017 statutory sick pay will increase to £89.35 a week.
4.Gender Pay Gap Reporting
From 6th April 2017 employers in private and voluntary sectors who employ 250 or more people will be required to publish statistics showing any gender pay gaps. For more information, please see our separate article on Gender Pay Gap Reporting.
5.New apprenticeship levy for large employers
From 6th April 2017 employers who annually pay more than £3 million in salaries will be charged a new apprenticeship levy of 0.5% of their total employee earnings subject to Class 1 secondary NICs. The majority of employers are unlikely to meet this threshold; however they may still benefit from the Government "co-investing”. For more information, please see our separate article on the new Apprenticeship Scheme.
From 6th April 2017 the personal income tax allowance will increase to £11,500, and the higher rate tax threshold will increase to £45,000. The lower earnings limit for Class 1 National Insurance contributions will increase slightly to £113 a week and the primary and secondary thresholds will be aligned at £157.
7.Changes to salary sacrifice schemes
From 6th April 2017 there will be restrictions on the tax savings that can be made through salary sacrifice schemes. Salary sacrifice for pension contributions, childcare vouchers and cycle to work will continue, but other types of savings will be restricted. Current salary sacrifice schemes which do not comply with the new rules will be phased out, with benefits such as private medical insurance and gym membership being phased out by April 2018 and long term benefits such as accommodation and school fees being phased out by April 2021.
8.Increase to employment tribunal award limits
From 6th April 2017 there will be several increases to employment tribunal awards and the figures to be used for calculating redundancy payments:
Awards Payment changes from 6 April 2017
Maximum compensation award for unfair dismissal £80,541 or one year's gross salary if lower
Maximum basic award for unfair dismissal and £14,670
statutory redundancy (30 weeks' pay)
Limit on one week's pay for calculating redundancy £489
and unfair dismissal basic award
Minimum basic award for unfair dismissal relating to £5,970
health and safety, being a trade union member,
occupational pension scheme trustee or employee
representative, or working time regulations
Minimum compensation award for employees £9,118
excluded from a trade union
9.Changes to tier 2 visa migrant workers
From April 2017 the salary threshold for experienced migrant workers applying for a visa under tier 2 of the points-based immigration system will increase to £30,000. Employers who employ migrant workers under tier 2 will also need to pay an immigration skills charge of £1,000 per worker per year. This will be reduced to £364 for small businesses and charities.