Government reforms (1): New Year, New Law

In order to welcome in 2018, below is a round-up of the most important employment law changes this year.   We’re sure to be covering many of these events in more detail in our Newsflashes and Newsletters so watch this space…

EXPECTED EARLY 2018

The Gig Economy and Ongoing Employment Status Cases

We will likely continue to see high-profile employment status cases in 2018.  These include the appeal in the Pimlico Plumbers case, which the Supreme Court is scheduled to hear in February 2018.  The Court of Appeal decision in Mr Y Aslam Mr J Farrar and Others v Uber is expected later in the year.  For further detail on these important cases please see our updates here.

Brexit and EU Immigration

A Home Office White Paper on immigration and a draft new Immigration Bill are expected possibly as early as the first quarter of 2018.

This should provide further clarity in relation to the rules governing European nationals’ right to continue to live and work in the UK following Brexit. We hope it will also give details about the rules governing the basis on which European nationals will be able to move to the UK following Brexit, details of which have not yet been released.

1 APRIL 2018

Increase in National Minimum Wage

The new rates are as follows:

• Age 25 and over:  National Living wage increase from £7.50 to £7.83;
• Age 21 to 24 (inclusive): increase from £7.05 to £7.38 per hour;
• Age 18 to 20 (inclusive): increase from £5.60 to £5.90 per hour;
• Age 16 or 17 (inclusive): increase from £4.05 to £4.20 per hour;
• Apprentice rate:  increase from £3.50 to £3.70 per hour; and
• Accommodation offset: increase from £6.40 to £7.00 per day.

4 APRIL 2018

Mandatory Gender Pay Gap (GPG) Reporting Deadline

All private and voluntary sector employers with 250 or more employees in England, Wales and Scotland must now publish information on their gender pay gap by 4 April 2018 under the GPG legislation.

All listed public sector employers with 250 or more employees in England must publish the same information by 30 March 2018 under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.

For more detail on the GPG requirements, see our updates here.

6 APRIL 2018

Increase in Statutory Payments:

The weekly rate of:

• Statutory Sick Pay (SSP) will rise from £89.35 to £92.05;
• Statutory Maternity Pay (SMP) and Maternity Allowance will rise from £140.98 to £145.18; and
• Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP) will rise from £140.98 to £145.18.

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 £113 to £116 in April 2018.

Taxation of Termination Payments – PILONs:

The Government has resolved the uncertainty over whether a payment made in lieu of notice (PILON) should be taxed.  The Government has provided that all PILONs, whether contractual or non-contractual, are taxable and subject to Class 1 National Insurance Contributions (NICs). The taxable PILON needs to be calculated on the basis of basic pay only.

This change comes into effect on 6 April 2018.

The way in which a standard termination payment is taxed will also change, but not until 2019. Currently, the first £30,000 of a termination payment is payable without deduction of income tax or NICs. Any amount over £30,000 is subject to income tax, but currently not NICs. The proposed change is that, in future, payment in excess of £30,000 will be subject to employer’s NICs (but not employee’s NICs).

This had been due to come into effect from April 2018. However, the Government has now postponed the implementation of this change to April 2019.

For further information on these changes, see our updates here.

25 May 2018

GDPR

The General Data Protection Regulation (GDPR) is set to come into force on 25 May 2018.

We have been regularly updating you about the new General Data Protection Regulation (GDPR), which on 25 May 2018 will replace the current EU Data Protection Directive and the Data Protection Act 1998.

For further detail see our updates here.

To the extent they have not already done so, employers should take steps now to assess the impact of the GDPR and prepare for its arrival.

Key themes of the new regime include:

• Stricter requirements for obtaining consent from individuals before processing their personal data. These will make it very difficult to establish valid consent in the employment context, meaning that employers will generally wish to rely on other lawful bases for processing data.
• A requirement to provide more detailed information to data subjects. This will require employers to have a thorough understanding of what and how employee personal data is being processed, and will necessitate existing employee data protection policies and/or privacy notices to be revised appropriately.
• A new requirement for organisations to be able to demonstrate compliance with data protection principles, which will include maintaining an “accountability record” of processing activities.
• Enhanced data subject rights, including, in addition to the subject access right already familiar to many UK employers, the “right to be forgotten”, the right to rectification and the right to object to processing in certain circumstances. These rights should be reflected in updated employee privacy notices.
• A requirement for certain organisations to appoint a Data Protection Officer (DPO). Specifically, a DPO will be required for (1) most public authorities or bodies; (2) organisations whose core activities consist of processing and require regular and systematic monitoring of data subjects on a large scale; and (3) organisations whose core activities consist of processing special categories of personal data and personal data relating to criminal convictions and offences (i.e., what we know currently as “sensitive” data) on a large scale.
• New cyber security and data breach notification obligations requiring higher standards of cyber security and personal data breaches to be reported to the relevant supervisory authority without undue delay and within 72 hours where feasible. From a human resource perspective, organisations may wish to establish a dedicated breach response team and train personnel to ensure prompt escalation of and response to any breach incident.
• New obligations on “processors”, meaning that employers should review the contracts they have with payroll processors, insurers and other suppliers to the HR function.

Also expected 2018:

Parental Bereavement (Pay and Leave) Bill: this Bill is making its way through Parliament. This is a Private Members’ Bill, but has attracted Government backing so is likely to become law. If passed, the Secretary of State will have power to make regulations to give at least two weeks’ paid leave to employees who lose a child below the age of 18 (including a still birth after 24 weeks).

Race pay gap reporting:  The Conservative Party election manifesto indicated that it would introduce mandatory race pay gap reporting for large employers, although no further details are available.

Cap on public sector exit payments:  We are expecting an announcement on implementation dates for the new cap on public sector exit payments and rules on repayment where someone is reemployed within 12 months. We understand the Government also still intends to implement further reforms.

Statutory sick pay:  The Government intends to consult on reforms to statutory sick pay, in particular around phased returns to work.  It will consider recommendations that SSP should be available to all regardless of income and should accrue based on length of service. It will also consider the Taylor Review recommendation that there should be a `right to return’ following sickness absence.

Grandparental leave: This was originally expected to be introduced in 2018 (see our updates here). A consultation on how to extend Shared Parental Leave and Pay to working grandparents was expected in May 2016, but was delayed due to the EU referendum. The Government is yet to make any further announcement as to whether this policy will be taken forward. Maybe 2018 is the year.