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Changes affecting employers in April 2017

March 15, 2017 4:19pm All News Stories  Employment Law News  Employment Law Changes April 2017

April is fast approaching and there are a number of important changes that employers need to be aware of.

1  National Minimum Wage

As of April 2017, the National Living Wage (the rate for those aged 25 and over) will increase by 30p from £7.20 to £7.50 per hour.

The National Minimum Wage (for those under the age of 25) will also rise as follows:

  • for 21 to 24 year olds, the rate will be £7.05 (currently £6.95)
  • for 18 to 20 year olds, the rate will be £5.60 (currently £5.55)
  • for 16 to 17 year olds, the rate will be £4.05 (currently £4.00)
  • for apprentices, the rate will be £3.50 (currently £3.40).

Currently, the National Living Wage is adjusted in April and the National Minimum Wage is adjusted in October. The government has decided to align the minimum wage calendar so that the rates for all workers will be revised in April.

2  Statutory pay rates

The statutory weekly rates of pay for maternity, paternity, shared parental leave and adoption are marginally increasing. As of 2nd April, the rate will increase from £139.58 to £140.98.

From 6th April, the weekly rate of statutory sick pay will also rise from £88.45 to £89.35.

3  Apprenticeship levy

Some key changes to apprenticeships in England are due to come into effect on 6th April 2017, principally the introduction of the apprenticeship levy.

This levy will be payable by employers with annual pay bills of more than £3 million. The government is also introducing a levy allowance of £15,000 per year, which means that the total sum an employer is required to spend is 0.5% of the pay bill, minus the £15,000 allowance.

For those employers who don’t pay the levy, the costs of apprenticeships will be split between them and the government. The employer will pay 10% of the cost and the government will pay 90%.

The levy is being implemented in April, but payments will commence in May 2017.

From May 2017, the employers who pay this levy will be able to access funding through a new digital apprenticeship service that enables them to spend available funds on apprenticeship training.

4  Gender pay

Gender pay gap reporting obligations come into force on 6th April 2017.

Employers will need to publish the following information:

  • The gap between the mean and median average hourly pay rates for male and female employees
  • The gap between the mean and median average bonus paid to male and female employees
  • The proportion of male and female employees who were given bonuses in the previous 12 month period
  • The proportion of men and women in each quartile pay band (lower, lower middle, upper middle and upper quartiles).

These obligations apply private sector and voluntary sector employers with 250 or more employees in England, Wales and Scotland on the “snapshot date”, which is the 5th April in the relevant year.

Companies will be required to publish their first gender pay report by 4th April 2018. Subsequent reports are then required by the 4th April every year.

5  Compensation limits and minimum awards

From 6th April, compensation limits and minimum awards payable under employment legislation will rise.

At present, the maximum statutory redundancy pay an employee can receive is £14,370 and this is due to rise to £14,670. The maximum compensation award for unfair dismissal will also increase from £78,962 to £80,541.

Seek legal advice from your Employment Law Adviser who can help you understand the exact nature of the changes and how best to approach them.

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