Key Employment Law Issues For Employers in 2017
1. Brexit – Since the referendum decision in June, Brexit has taken its share of press coverage. Article 50 is set to be triggered by the end of March 2017 starting the two-year negotiating period.
2. Status and the gig economy – Arguably, the most important employment law decision of 2016 was that Uber drivers are workers rather than self-employed. A judge in the London employment tribunal is currently hearing the first claim of four to be brought against similar companies operating similar styles of business.
3. Paying legal minimums – The Government will continue to focus on making sure employers are correctly paying the National Minimum Wage (NMW) and National Living Wage (NLW) in 2017. The Chancellor used the Autumn Statement to announce a £4.3m yearly increase in the amount available for enforcement of the minimum wage. This money will be used to set up specific teams from HMRC, which will target employers most likely at risk of not paying legal rates. 2016 saw a record number of employers ‘named and shamed’ for underpaying workers and it would appear the issue of underpayments is going to remain an important
future focus for the Government.
4. Gender pay gap reporting – The law requiring employers to publish a gender pay gap report will take effect from 6 April 2017. Employers with 250 or more employees will have to calculate and publish the mean and median hourly pay gap and annual bonus gap between men and women. Employers will also have to calculate the number of men and women who fall in to four pay quartiles. The report has to be published on the employer’s website within a year of the calculation date, i.e. by April 2018 for the first report, for three years and has to be submitted to the Secretary of State. Draft regulations were released in December and the explanatory notes state, for the first time, that a failure to publish the report is an unlawful act which may prompt action from the
Equalities and Human Rights Commission.
5. Apprenticeship Levy – April 2017 will also see the commencement of the Apprenticeship Levy, the Government’s initiative to ensure the creation of three million apprenticeships by 2020. Employers with an annual paybill of £3m and over will have to pay 0.5% of their pay amount in to a digital apprenticeship account. The Government will give employers a £15k yearly allowance to offset against this amount which will be applied monthly. The funds entering the account have to be used within 24 months or they will expire, however, companies in a group structure will be able to transfer a maximum of ten per cent of their funds to other employers in their supply chain from 2018.
6. Salary sacrifice – Salary sacrifice is often seen as a useful way of providing employee benefits whilst receiving a financial benefit; the employee doesn’t pay income tax and National Insurance contributions aren’t paid on the amount sacrificed. These schemes have expanded greatly over recent years to provide a multitude of goods to employees at a significant cost to the Exchequer. The tax advantage will be removed for all salary sacrifice schemes from April 2017 except for the provision of pensions, vouchers and cycle to work schemes and ultra-low emission vehicles. Schemes in place before April 2017 will be protected from these changes until April 2018 with some remaining protected until 2021.