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Employment Law Updates for 2017

13th January 2017 HR and H&S

As always April will see some significant changes to employment law

National Minimum wage including the National Living Wage will increase from 1st April 2017 as follows:

  • £7.50 per hour – 25 years old and over
  • £7.05 per hour – 21-24 years old
  • £5.60 per hour – 18-20 years old
  • £4.05 per hour – 16-17 years old
  • £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

After remaining the same for 2016 a Ministerial Statement proposes that Statutory Maternity, Paternity, Adoption, and Shared Parental Leave will increase to £140.98 per week, whilst Statutory Sick Pay will increase to £89.35 per week.

Gender Pay Gap Reporting

The final regulations relating to the gender pay gap reporting are now published and subject to approval from Parliament will become effective on the 6th April 2017.

The gender pay gap is the average difference between men and women’s aggregate hourly pay.

This means that Organisations that have 250 employees or more must publish information relating to the pay of male and female employees.

Consideration will have to be given to who will fall into the scope of this legislation as this is not defined within the Regulations.

There are guidance notes that do stipulate that employment under a contract of employment, apprenticeship or a contract personally to do work must be included.

This may mean that information relating to those carrying out contract work or freelance services may need to be provided.

Once approval from Parliament has been granted we will update you further on this topic.

Changes to Salary Sacrifice Schemes

Further to the Autumn Statement in 2016 with effect from April 2017 the Government will reduce the number of benefits that can be offered to employees exempt from tax and NI contributions.

Salary sacrifice schemes relating to pensions savings, childcare vouchers, cycle-to-work and ultra-low emissions cars will be unaffected.

Arrangements that were in place prior to April 2017 will not be affected until April 2018.


The Apprenticeship Levy

For any Organisation that has an annual payroll of more than £3 million the apprenticeship levy will come into effect on 6th April 2017.

Once an Organisation begins paying the levy this will then enable them to access funding which is available to be used to provide training for apprentices.

As defined by the Government the meaning of ‘relevant apprentice’ to determine which apprentices under the age of 25 qualify for the zero-rate of employer Class 1 NICs requires that a ‘relevant apprentice’ is one that will have a written agreement, specifying the government recognised apprentice framework/standard, with a start and expected completion date.

This will be an agreement, between the training provider, apprentice and employer and will be the evidence the employer needs to retain when applying the zero-rate of employer Class 1 NICs for an apprentice under 25.

Changes to Foreign Worker Sponsorships

In order to qualify for a tier 2 visa the salary threshold for experienced workers will be increased to £30,000 in April 2017.

Employers will be required to pay a £1,000 immigration skills charge for each certificate of sponsorship for tier 2 workers. Some public sector roles will be exempt from this increase until 2019.

GIG Economy

The so called “gig” economy is defined as a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

The high profile case Aslam and others vs Uber BV and others (EAT) was a major test case that was widely talked about during 2016.

The employment tribunal ruled that the employment status of Uber drivers is that of a worker and not self-employed.

This means that they would be entitled to be paid the national minimum wage and receive paid annual leave.

This case is expected to go to the Employment Appeal Tribunal (EAT) and there are further claims against companies that operate in much the same way as Uber such as Excel, City Sprint, and Hermes.