Is your business ready?
Spring is a busy time for employers as there are changes to employment law that need to be implemented. When these changes come in to force on 1st April we ask the important question - what will this mean to you, your businesses and your employees?
Here is a quick guide to help and support you through the four key changes that are predicted to impact small businesses ensuring that you are ready and prepared. The four big areas are:
- Gender pay-gap reporting
- National minimum wage increase
- Apprenticeship levy
- Salary sacrifice scheme tax scheme abolished
Gender pay-gap reporting
Unfortunately, despite huge progress on the equality front, women are still paid less than men. This new law seeks to address this gap and requires employers with more than 250 employees to publish gender pay gaps from April 2017.
If your organisation has fewer than 250 employees, it can publish the data and report it voluntarily but it is not obliged to do so.
If a company is complying with the Equality Act, there is no obligation to explain the gender pay gap or address it or even produce a report about it. However there is sure to be significant penalties regarding a company's reputation due to the amount of press coverage it will receive if it doesn't. Companies would also be advised to publish their results as any failure to do so may affect candidates applying for a job as the company's prospects could appear less attractive and the business itself look dishonest.
Companies should now be collating data to ensure that they comply with the new reporting procedures due April 2017.
National minimum wage and national living wage
The National Minimum Wage rate increases will come in to effect from 1st April. The Government has introduced a 'name and shame' policy for bad payers and so it's important for companies to take this seriously.
Aged 21-24 – £7.05 (up from £6.95)
Aged 18-20 – £5.60 (up from £5.55)
Aged 16-17 – £4.05 (up from £4.00)
Apprentices – £3.50 (up from £3.40) **applicable to apprentices aged 16-18 and those aged 19 and over who are in their first year. All other apprentices are entitled to the NMW for their age
The next rise to the National Living Wage will take place on 1st April and will see rates go up to £7.50 per hour for those aged 25 and above.
More information can be found on the Government website here and here.
Salary sacrifice schemes
As of 6 April 2017 the Government will abolish tax savings through many salary-sacrifice schemes. This will not include schemes relating to pension savings, child care, cycle-to-work or ultra-low emission cars. These schemes which were in place prior to April 2017 will be protected for twelve months until April 2018 while any arrangements related to cars, school fees or accommodation will be protected until April 2021.
A new initiative is due to take effect in April 2017 that sees new apprenticeship funding for 16-18 year olds and 19-24 year olds. The objective of this funding is to encourage employees and young people to improve job opportunities and to also increase production. The levy will be 0.5% of an employer's pay bill whose payrolls are over £3m. This will be used to fund 3m additional apprenticeships over the next 5 years.
To offset the employer's levy payment, businesses will receive £15,000. More information can be found on the Government website.