April is always a key time of the year for HR professionals and employers alike, and the recent legislation changes come at a time of mass Brexit upheaval and the triggering of Article 50.
As new employment legislation comes into force, we look at the four key changes affecting employers: gender pay gap reporting, apprenticeship levy, the immigration skills charge regulations, national minimum wage, and pension’s advice allowance.
The new changes introduced by the government in April 2017 are as follows:
Gender Pay Gap Reporting
To address the ongoing issue of the gender pay gap, businesses who employ over 250 people will now be required to publish their gender pay gap and gender bonus information on their own website and on a government website.
The publication will appear on their own website for three years, and will be available for customers, employees and potential future employees to view.
Employers in the private and voluntary sector must base their pay data on staff employed on a snapshot date of 5th April each year, and organisations in the public sector must use 31st March as their snapshot day.
Employers have the opportunity to give reasons for the results, outline areas for improvement and detail actions being taken to reduce/eliminate the gender pay gap.
From 6th April 2017, employers with a payroll of over £3 million must pay the apprenticeship levy each month, to the HMRC through the PAYE process.
The levy is charged at 0.5% of the annual pay bill, and its purpose is to raise money to meet the cost of apprenticeship schemes across the UK.
The new scheme is expected to operate from 1st May 2017, and employers that do not pay the levy will also be able to access funding for apprenticeships.
Intermediaries Legislation (IR35)
If the individual could be regarded as an employee if the intermediary did not exist, people who work in the public sector through an intermediary will need to pay employment taxes in a similar way to employees.
The fee payer will calculate Income Tax and primary (employee) National Insurance contributions and pay them over to HMRC.
Where hiring teams use an employment agency, or other third party to supply labour they will need to tell them if the rules apply for the positions they are filling.
National Minimum Wage
The National Minimum Wage has increased for all ages, in line with the annual increase in the National Living Wage for workers aged 25 and over.
As of 1st April 2017, the National Minimum Wage increased for workers over 25 to £7.50 per hour from £7.20. For workers ages 21-24 it rose to £7.05 from £6.95, and those aged 18-20 will now be entitled to £5.60 an hour from £5.55. Under 18s will now earn £4.05, from £4.00, and apprentices will go from £3.40 to £3.50.
Future changes for both the National Minimum Wage and National Living Wage will take place in April of each year.
Pensions Advice Allowance
Members of defined-contribution and hybrid pension schemes will be able to access £500 tax free from their scheme, to be redeemed against the expense of financial advice.
From 6th April, the value of pensions and retirement advice provided by employers increased from £150 to £500, and the increase is designed to make advice more affordable and encourage consumers to consider taking advice to plan for their retirement.
The changes follows a recommendation from the Financial Advice Market Review (FAMR) which found that there is a significant impact on retirement incomes if financial advice is received early.