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  • Employment Law Changes in April 2017

    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.
     
    6.Tax changes 
     
    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. 
     


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