April is a busy month for businesses with the start of the new financial year and all that entails. April 2018 also brings a number of key employment law updates that you should be aware of.
Deadline for gender pay gap reports
If you are an employer with 250 employees or more, legislation regarding gender pay gap reporting means you will need to publish your gender pay gap data annually.
Whilst this issue has been in the spotlight for some time, the first deadline for publishing gender pay gap reports for private companies is 4th April 2018. If this applies to you, you can register your organisation on the government's online reporting service.
Once the deadline has passed, those companies who are required to report can not forget about this, as it is an annual requirement with the next ‘snapshot date’ for private companies to collect pay data being 5th April 2018.
There has been, and continues to be much publicity about pay gaps and you may find that employees are raising more questions or complaints about their pay, and the pay of others around them.
Do you need to review your pay and reward strategy?
Having a clear pay and reward strategy, that is justifiable on the basis of roles and workforce plans will help mitigate the risks of inadvertently discriminating in your pay structure.
Consider including independent HR representation on your remuneration committee to provide strategic advice on setting pay.
Minimum wage increases
The National Living Wage, the minimum rate that is applied to workers aged 25 and over, will see a 4.4% increase up to £7.83 per hour on 1st April 2018. All other National Minimum Wages will rise from the same date, with those on the apprenticeship rate receiving a record 5.7% increase from 2017.
Year 2017 (Current Year)
Age 25 and over - £7.50
Age 21 to 24 - £7.05
Age 18 to 20 - £5.60
Age Under 18 - £4.05
Apprentice Rate - £3.50
Year 2018 (From 1st April 2018)
Age 25 and over - £7.83
Age 21 to 24 - £7.38
Age 18 to 20 - £5.90
Age Under 18 - £4.20
Apprentice Rate - £3.70
Recently the government named and shamed 179 employers for not paying the national minimum wage and applied fines as well as requiring the employers to pay monies owed.
Don’t let this be you! Take action to ensure you are paying the correct rates for your employees.
Changes to taxation of termination payments
In a move to simplify the taxation of termination payments, the tax distinction drawn between contractual and non-contractual pay in lieu of notice (PILON) payments will be removed, so that all PILONs are taxable and subject to Class 1 NICs regardless of whether there is a contractual PILON clause.
The first £30,000 of a termination payment will remain exempt from income tax
This change will take effect from 6th April.
You can find more information about these changes on the HMRC website: Income tax and NICs: treatment of termination payments.
Auto-enrolment contributions on the rise
The minimum contributions that you and your staff pay into your automatic enrolment workplace pension scheme are increasing.
From 6th April, employers will have to contribute 2% (up from 1%) and employees have to contribute a minimum of 3% (also up from 1%). The minimum contributions will increase again from April 2019.
These increases are a legal requirement; a failure to increase contributions appropriately could lead to a daily fine and being publicly named for non-compliance.
Family friendly payments and SSP
Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from 9th April 2018.
Statutory sick pay (SSP) is due to rise from £89.35 to £92.05.
The lower earnings limit will rise from £113 to £116.
Tribunal awards to become more expensive
Employers who lose claims at tribunal will have to pay more in compensation from April as the maximum limits on tribunal awards receive their annual update. These increases come at a time when employment tribunal claims are on the up, with claims increasing by 90% in October-December 2017 compared to the previous year.
From 6th April, the maximum award for an unfair dismissal, totaling the maximum basic and compensatory award, will be £98,922; a significant amount of money.
Do you need to review your policies and practices to ensure you are minimising the risk to your business?
There are many reasons why an employee might raise a grievance against you, so it is important that you have clearly set out policies, to help everyone understand what is expected of them in the workplace and how to deal with issues should they arise.
Are the procedures being followed closely to help resolve disputes in the best way for both the employee and the employer?
You could have the best policies in the world but if they are not followed consistently then they will not resolve the issues they are designed to address.
Are your line managers clear on their role?
Training and supporting your managers to manage staff well is important for them, the staff they manage and your business.
To discuss any of the issues raised in this article or any people issues you may have please do not hesitate to contact me on 07854917634