2017 looks set to be a busy year for employers with a range of significant employment law changes coming into force, and ongoing uncertainty regarding what will happen to UK employment legislation derived from Europe following the Brexit referendum results. Here’s 5 key employment law changes for 2017, with important topics you need to know as an employer and the effects they may have on your business.
1) Gender Pay Gap Reporting
As of April this year, businesses with more than 250 employees will be required to collect data on and then report how they pay men and women, which will affect around 8,000 businesses across the UK. Businesses will be required to publish the data no later than April 2018 (employers will have up to 12 months to choose when to publish the information).
As an employer, you will need to ensure you’re as prepared as possible. For more information on what needs to be done to ensure your business complies with regulations, read ACAS’s full guidance
2) Introduction of Apprenticeship Levy for large employers
From April 2017, employers with a wage bill of more than £3 million will have to pay a 0.5 per cent levy to fund apprenticeships. The broad aim is to raise £3bn a year to meet a target of three million new ‘high quality’ apprenticeships by 2020.
This also means that large employers will be able to access levied amounts, plus a government top-up of 10%, 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% towards the cost of an apprenticeship, with the Government paying the remaining cost.
For more information on the Apprenticeship Levy, read the CIPD’s guide on how it will work in practice.
3) General Data Protection Regulation (GDPR)
On 14 April 2016, the European Parliament approved a new General Data Protection Regulation (GDPR), and despite Brexit the UK will implement the General Data Protection Regulation (GDPR) when it comes into force on 25 May 2018.
May of 2018 might seem a long way off, but the scope of changes needed to comply means employers need to start preparing this year. Employers will need to prepare for the upcoming changes in order to avoid risking fines of up to €20 million or 4% of annual worldwide turnover, whichever is higher.
To ensure compliance with the new regulations, employers will have to carry out audits of employee personal data that they collect and process and make sure it meets GDPR guidelines for employee consent. New governance and record-keeping requirements mean that employers will also have to create or amend policies and processes on privacy notices, data breach responses and subject access requests.
For more information on General Data Protection Regulation, read Personnel Today’s Employer Guide
4) National Living Wage & Minimum Wage Changes
The Government's National Living Wage was introduced on 1 April 2016 for all working people aged 25 and over, and is currently set at £7.20 per hour. From the 1st of April 2017, the rate will be:
- £7.50 per hour - 25 yrs old and over
- £7.05 per hour - 21-24 yrs old
- £5.60 per hour - 18-20 yrs old
- £4.05 per hour - 16-17 yrs old
- £3.50 for apprentices under 19 or 19+ who are in the first year of apprenticeship.
5) Restrictions placed on salary-sacrifice schemes
In his first Autumn Statement last year, Chancellor Philip Hammond clamped down on salary sacrifice schemes which means that as of April 2017, the government will abolish tax exemptions on most salary sacrifice benefit schemes, in a move that will fundamentally redefine the nature of employee benefits.
Salary sacrifice schemes are not being banned outright, however the move will affect many benefits providers, with employers facing difficult choices over which employee benefits to continue if the majority become uneconomic or unattractive for their staff.
Many employee benefits such as gym memberships, mobile phones and white goods, among others, will become highly unattractive, whereas schemes related to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars will not be affected. Schemes in place prior to April 2017 will be protected until April 2018, while arrangements related to cars, accommodation and school fees will be protected until April 2021.
If you’re an employer, what impact do you think the changes to employment laws will have on your business?
Published by JVP Group on 10th January 2017.