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We are almost one quarter of the way through 2017 (already?!). Each year the beginning of April is notable from an employment law perspective, with a number of changes usually coming into force. This year is no different and so this week we take a look at some of the key changes coming next month.

National minimum wage (NMW)

The minimum hourly rates of pay to which most workers are entitled will increase with effect from 1 April. Both the NMW and the National Living Wage (NLW) are set to increase, as detailed below;

Category

Current Rate

Rate from 1 April 2017

NLW (ages 25+)

£7.20

£7.50

NMW (ages 21-24)

£6.95

£7.05

NMW (ages 18-20)

£5.55

£5.60

NMW (ages 16-17)

£4.00

£4.05

Apprentices (ages under 19, or 19+ and in first year of apprenticeship)

£3.40

£3.50

 

It is also worth noting that, with effect from 1 April, all agricultural workers will be entitled to a minimum hourly rate of £7.50, irrespective of their age/duties.

Statutory rates and tribunal award

April will also see increases in relation to a number of statutory payments and on maximum employment tribunal awards.

From 6 April, the limit on a week’s pay, which is used for calculating statutory redundancy payments, as well as the unfair dismissal basic award, will increase from to £489 (from £479). This means that the maximum basic award will increase to £14,670 (from £14,370).

From 6 April, the limit on the compensatory award for unfair dismissal will also rise, to £80,541 (from £78,962). It is worth noting that it will remain the case that the maximum compensatory award is the lower of this limit and 52 weeks’ gross pay. It is also worth noting that in a limited number of unfair dismissals, there is no such limit (e.g. where the reason for the dismissal was that the claimant made a protected disclosure).

From 6 April, statutory sick pay rates will be £89.35 per week (from £88.45).

Finally, there will also be increases to family-friendly allowances. From 2 April, statutory maternity, adoption, paternity and shared parental pay will rise to £140.98 per week (from £139.58).

Apprenticeship levy

The new tax year will see the new apprenticeship levy come into force. This replaces the current system which enables employers to choose and pay for the apprenticeship training they want. The levy, which was introduced by sections 98 to 121 of the Finance Act 2016, will require all UK employers with an annual wage bill of more than £3 million to pay 0.5% of that wage bill towards the cost of apprenticeship training. The levy will be paid by employers through PAYE. Any employer who is liable is entitled to an apprenticeship levy allowance of £15,000 to offset against the levy liability. If two or more companies are “connected companies” (as defined within sections 450 and 451 of the Corporation Tax Act 2010) at the beginning of a tax year, they will be entitled to only one £15,000 allowance between them for that year, which can be split as determined by the companies.

Gender pay gap reporting

From 6 April the Equality Act 2010 (Gender Pay Gap Reporting) Regulations 2017 will come into force. The new Regulations will apply to large private and voluntary sector employers, which is defined as those with 250 or more employees on 5 April of each year. Affected employers will be required to publish gender pay gap information on their own websites and a government website, with the first reports due on 4 April next year.

Reports must show overall gender pay gap figures, calculated using both the mean and median average hourly pay, in addition to the proportion of men and women in each of four pay bands (being lower, lower middle, upper middle and upper). There is also a requirement to report on the difference between men and women’s mean and median bonus payments.

Business immigration

Finally, with effect from 6 April 2017, it will become more costly to sponsor migrants under Tier 2 of the ‘points-based’ system.

A new ‘Immigration Skills Charge’ means small or charitable businesses wishing to sponsor a worker will be required to pay £364, while large employers will have to pay £1,000. The charge is payable upfront in respect of each year of the visa or ‘leave to remain’ required for the migrant.

The minimum annual salary threshold for most Tier 2 (General) sponsored workers over the age of 26 will increase to £30,000 (from £25,000).

The minimum annual salary threshold for migrants which exempts employers from applying the resident labour market test will increase to £159,600 (from £155,300).

The Tier 2 (Intra-Company Transfer) ‘short-term’ category will close to new applicants in April. Employers will still have the option to sponsor migrants from an overseas branch under the ‘long-term’ category, but this has a significantly higher minimum annual salary threshold (being £41,500).

If you have any queries about any of these changes please contact any member of the Stronachs Employment Team.

Rowan Alexander, Solicitor

 

Chambers UK 2018

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