Employment law changes

The following key changes to employment law will come into force in April 2017:

  • From 6 April 2017, the Finance Act 2016 will require employers with an annual pay bill in excess of £3 million in a given year to pay a 0.5% apprenticeship levy on their pay bill to fund the costs of apprenticeship training and assessment. Employers will receive an annual allowance of £15,000 to offset against their levy payment. The levy will be collected through PAYE on a monthly basis. A new system for apprenticeship funding in England will then begin to operate from 1 May 2017. Levy-paying employers will be able to access the levied monies, plus a government top-up of 10%, to fund apprenticeships for their workers from accredited training providers. Non-levy paying employers will still be able to access government apprenticeship funding but they must make a 10% contribution to the training costs and the government will pay 90%, up to the maximum amount of funding available. Although the levy applies UK wide, different arrangements for apprenticeship funding will take effect in Wales, Scotland and Northern Ireland.
  • The National Minimum Wage (Amendment) Regulations 2017 will increase the national minimum wage (NMW) and national living wage (NLW) rates from 1 April 2017. The NLW for workers aged 25 or over will increase to £7.50 per hour, the NMW standard rate for workers aged 21 to 24 will increase to £7.05 per hour, the NMW development rate for workers aged 18 to 20 will increase to £5.60 per hour, the NMW young workers rate for workers aged 16 and 17 will increase to £4.05 per hour and the NMW apprentice rate will increase to £3.50 per hour.
  • The Employment Rights (Increase of Limits) Order 2017 will increase the maximum amount of a “week’s pay” from £479 to £489 from 6 April 2017. A week’s pay is used to calculate statutory redundancy payments, the unfair dismissal basic and additional awards and payments to employees in the event of insolvency. From 6 April 2017, the Order also increases the limit on the unfair dismissal compensatory award from £78,962 to £80,541 and it increases the limit on the daily amount of statutory guarantee pay from £26 to £27.
  • The Social Security Benefits Up-rating Order 2017 will increase the weekly rate of statutory sick pay from £88.45 to £89.35 from 6 April 2017 and it will also increase the standard weekly rates of statutory maternity, adoption, paternity and shared parental pay from £139.58 to £140.98 from 2 April 2017. The earnings threshold, below which employees are not entitled to these statutory payments, will increase from £112 to £113 per week from 6 April 2017.

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