Employment law changes taking effect in April 2017

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

  • The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 will require private and voluntary sector employers with 250 or more employees to report on their median and mean gender pay gap figures, their median and mean gender bonus gap figures, the number of men and women in each quartile of their pay distribution and the percentage of men and women who received a bonus. The data must be based on a snapshot date of 5 April, with publication of it taking place no more than 12 months later. The first snapshot date is 5 April 2017 and so the first set of data is due for publication by no later than 4 April 2018, both online on the employer’s own website and on a government website. Similar provisions will come into force for the public sector in England under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, but their data snapshot date will be 31 March.


  • 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. In addition, from 1 April 2017, the provisions in the Enterprise Act 2016 establishing the Institute for Apprenticeships and making it an offence for training providers in England to describe a course as an apprenticeship if it is not a statutory apprenticeship will come into force. In the case of this latter provision, employers cannot commit the offence in relation to their employees.


  • 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.


  • The Immigration Skills Charge Regulations 2017 will impose a new skills charge on sponsors of non-EEA workers under Tier 2 of the points-based system for entry clearance applications for such workers submitted from 6 April 2017. The skills charge is payable when the worker is assigned a certificate of sponsorship in the General or Intra-company Transfer categories where they are applying from either outside the UK for a visa, inside the UK to switch to this visa from another or inside the UK to extend their existing visa. The skills charge is £1,000 per year and is payable upfront for all the years covered by the certificate of sponsorship. The charge is reduced to £364 per year for small and charitable employers. The skills charge does not apply if the employer is sponsoring a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and who is applying from inside the UK to extend their Tier 2 stay with either the same or a different sponsor. There are also exemptions for Tier 2 (Intra-company Transfer) graduate trainees, workers recruited to do specified PhD level occupations and Tier 4 student visa holders in the UK switching to a Tier 2 (General) visa.


  • From 6 April 2017, the Finance Bill 2017 will limit the income tax and employer NICs advantages where benefits in kind are offered through salary sacrifice. There will, however, be no change to the tax and NICs advantages of salary sacrifice arrangements for pension saving into a registered pension scheme, employer-provided pensions advice, employer-supported childcare, cycle to work schemes or ultra-low emission cars. In addition, arrangements already in place prior to 6 April 2017 will be protected until April 2018 and arrangements relating to accommodation, cars and school fees will be protected until April 2021.

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