Spring means changes in employment law for HR professionals but 2017 brings a great deal more changes than usual. The most significant shifts are the introduction of the gender pay gap reporting for large companies and the immigration skills charges.It is imperative for businesses to fully comply with all the new employment laws and meet the new set of requirements.
Non-compliance could mean for a business substantial fines so read below and be wary!
1. Gender pay gap reporting
Every year, larger employers (those with 250 or more employees) will have to report data about their gender pay gap, including bonus payments. Employers in scope need to make sure that they can capture the necessary data from 2016/17 and publish employee pay and bonus pay information along with numbers of men and women employees. The first report deadline expected in April 2018.
2. Reform to the intermediaries rules (IR35) in the public sector
New rules will apply in relation to payments made from 6 April 2017. The changes will apply to: public authorities who hire off-payroll contractors, public sector tax managers, payroll managers, human resources managers and procurement managers, agencies and third parties who supply contractors to the public sector, contractors who provide their services to a public authority through an intermediary.
The fee-payer (the public authority, agency, or other third party paying the intermediary) will calculate Income Tax and primary (employee) National Insurance contributions (NICs) and pay them over to HMRC. These amounts will be deducted from the intermediary’s fee for the work provided.
3. National minimum wage
Increases to the national minimum wage will deliver higher payroll figures for many businesses. The next annual increase will take place on 1 April 2017. This includes the national living wage, which for workers aged 25 or over will increase from £7.20 to £7.50 an hour.
The rates within other age bands increase as follows:
- £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 or over who are in the first year of apprenticeship
4. Immigration skills charge
From 6th of April 2017, organisations paying for general (tier 2) visas for the employment of foreign workers must pay an immigration skills levy of £1,000 per worker (£364 for small employers and charities) apart from the fees for visa applications. The tier 2 (general) salary threshold will increase to £30,000 for migrants who are “experienced workers”.
5. Apprenticeship levy
Employers with an annual payroll of over £3 million must pay a 0.5 per cent levy on their total pay bill. Businesses in England that pay the levy will be able to access funding through a digital service. The new system of funding is expected to operate from 1 May 2017. Smaller businesses that exempt from the levy will also be able to receive funding for accredited apprenticeships by contributing 10 per cent towards its cost, with the Government paying the rest.
6. Restrictions to salary sacrifice schemes
Tax savings attracting tax and NIC advantages made possible by many salary sacrifice arrangements will be limited. This change is expected to take effect from 6 April 2017, with some exemptions. Arrangements already in place are protected until April 2018, and until April 2021 for some benefits.
7. Pensions advice allowance is introduced
This new authorised payment would be for the facilitation of adviser charges up to £500, for the purpose of financial advice on retirement. To be an authorised payment, the funds would need to be paid direct from the scheme to the financial advisor. The value of pensions advice provided by employers on which there is tax and NIC relief will increase from £150 to £500.
8. Statutory family-related pay and sick pay rates increase
The weekly rate of statutory maternity, paternity, adoption and shared parental pay will increase to £140.98 for pay weeks commencing on or after 2 April 2017. The weekly rate of statutory sick pay will increase to £89.35 from 6 April 2017.
9. Statutory redundancy pay increases
On the 6th April 2017 new caps on employment statutory redundancy pay take effect. Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount. From the 6th April, this is £489 increasing from £479.
2017 HR departments have to tackle a series of new challenges. Synel UK offers a comprehensive tool allowing precision & efficiency in real-time employee status display, holiday and absence/sick leave management, costing & attendance reports, Human Resource functions, job costing modules, access control and more.
If you think Synel can assist your organisation, give us a call on 0208 900 9991 or drop us an email at sales@syneluk.com
