April changes: A reminder

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It’s April and, as usual, means a spring clean for employment law.  Although we’ve covered the majority of these changes in previous newsletters and alerts, we thought it was worth a quick reminder:

1 April 2017

Increase to National Minimum and Living Wages

In Autumn Statement 2016 the Chancellor of the Exchequer announced that the hourly rate of the National Living Wage, the rate for workers who are aged 25 and over, will rise from £7.20 to £7.50.

In addition, the National Minimum Wage rates are now also being increased in April (rather than October).  The new rates are as follows:

  • age 21 to 24 (inclusive): increase from £6.95 to £7.05 per hour;
  • age 18 to 20 (inclusive): increase from £5.55 to £5.60 per hour;
  • age 16 or 17 (inclusive): increase from £4 to £4.05 per hour;
  • apprentice rate:  increase from £3.40 to £3.50 per hour; and
  • accommodation offset: increase from £6 to £6.40.

Future changes to the hourly rate of the National Minimum Wage and the National Living Wage will take place at the same time in April each year.

6 April 2017

Increase to Statutory Rates

There has been an increase in the consumer price index (CPI) of 1% in the year to September 2016, and therefore the Government (the DWP) has announced the following proposed increases to statutory benefit payments which will be effective in April 2017:

The weekly rate of:

  • Statutory Sick Pay (SSP) will rise from £88.45 to £89.35;
  • Statutory Maternity Pay (SMP) and (maternity allowance) will rise from £139.58 to £140.98; and
  • Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP) will rise from £139.58 to £140.98.

To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit.  The lower earnings limit is increasing from £112 to £113.

The Apprenticeship Levy

An Apprenticeship levy to be paid by employers in all sectors with an annual wage bill in excess of £3m is due to be implemented on 6 April.  The levy will be 0.5% of their wage bill and will be used to fund apprenticeships. For further information see our October 2016 Newsflash Apprenticeship levy.

The Department for Education and the Skills Funding Agency have published an online apprenticeship service, available here, and encouraged large employers to register before 6 April 2017. The service is the platform through which payment of the apprenticeship levy will be managed, and includes a facility to estimate the required levy. The service also aims to help employers find apprenticeship training and to post details about current apprenticeship and traineeship vacancies.

Gender pay gap reporting regulations

Employers with 250 or more employees in all sectors are required to calculate their gender pay gap and bonus pay gap calculated from pay information using the employer’s usual pay period in which 5 April falls.

Therefore although the first gender pay gap reports will not be due until 4 April 2018, employers will need to capture their first set of gender pay gap data in April 2017. For further information see our December 2016 Newsletter Government reforms (3): Gender pay gap – mend the gap!

Increases in statutory payments and Tribunal awards

On 6 April 2017 the limits to Tribunal compensation will increase where the dismissal (or detriment, or whatever it is that is being complained about) takes place on or after 6th April 2017.

Increases as follows:

Unfair dismissal compensatory award:

Limit from 6 April – £80,541

Week’s pay (used to calculate redundancy payments and other awards):

Limit from 6 April – £489

Basic award:

for certain unfair dismissals (trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative)

Limit from 6 April – £5,970

The increases are based on the September RPI which increased by 2.0% since the previous year.

apprenticeship contracts