Each year April is a busy time for companies and HR professionals as new and amended employment law takes effect. As the employment law is developing, here are the 5 key changes you can expect:
Gender Pay Gap
Employers in England, Wales and Scotland with 250 or more employees must publish a gender pay gap report on their website, and upload the results to the Government’s website. The deadline is 4th April 2018, and the report must stay on the website for at least three years.
The report will show information about the differences in pay between men and women in the workforce, based on a snapshot date of 5th April 2017, under the Equality Act 2010 Regulations 2017. Some organisations have included a narrative to add context to the numbers.
Minimum Pay Increase
From 1st April 2018, the National Living Wage increased, and failure to apply this correctly can lead to enforcement action. For workers aged 25 and over, their wage increases to £7.83. Other national minimum wage rates also increased, with workers aged 21-24 receiving £7.38, those 18-20 on £5.90 and workers under 18 getting £4.20.
Unless workers opt out of the new retirement savings plan, there will be increases from the current total minimum contribution of 2% of qualifying earnings take place on 6 April 2018, rising to 5%, and on 6 April 2019, reaching a total minimum amount of 8%.
For the average worker, it works out at £540 each year out of your salary that goes into the pension pot, and the company you work for also has to double their input, however some employees may decide they would rather have the money now than save it until their retirement.
Family related and statutory sick pay
From 1st April 2018, the weekly rate of statutory maternity, paternity, adoption and shared parental pay increases to £145.18, and from 6th April, the weekly rate of statutory sick pay increases to £92.05.
Taxation of termination payments
The important changes to the rules on taxation of termination payments come into play on 6th April 2018. Whether or not a payment in lieu of notice (PILON) is taxable has traditionally been dependent on the terms of the employee’s contract of employment.
Going forward, the distinction between contractual and non-contractual PILONs will be removed, ensuring that the first £30,000 of a termination payment remains exempt from income tax and that any payment paid to any employee that relates solely to the termination of employment continues to have an unlimited employee NICs exemption.