As 2016 draws to a close, many organisations are already planning for the year ahead. Employment law has had another busy twelve months, and 2017 is shaping up to be no different. To help employers prepare, we’ve pulled together the key changes expected next year and what they might mean in practice.
National Living Wage and National Minimum Wage Increases
From April 2017, the National Living Wage (for workers aged 25 and over) is due to rise again. The National Minimum Wage rates for younger workers and apprentices will also change. Employers with large numbers of hourly-paid or lower-paid staff should build these increases into their 2017 budgets and review payroll to ensure continued compliance.
Gender Pay Gap Reporting
One of the most significant developments for 2017 is the introduction of gender pay gap reporting for large employers. Organisations with 250 or more employees will be required to publish their gender pay data, including bonus information. Although the first snapshot date falls in April 2017, the publication deadline will follow in 2018.
That said, the preparation needs to begin early. Employers may want to review internal data now, identify any significant gaps, and consider steps to address them before figures are published.
Apprenticeship Levy
The new Apprenticeship Levy will take effect from April 2017. It applies to employers with an annual pay bill of £3 million or more, who will be required to contribute 0.5% of that bill through their PAYE system.
Even businesses below the threshold should keep a close eye on the wider apprenticeship reforms, as the rules around funding and training providers will shift for everyone.
Changes to Statutory Payments
As usual, April will bring changes to statutory payments, including statutory maternity pay, paternity pay, adoption pay and sick pay. Although final figures are still to be confirmed, it’s likely that increases will follow the usual pattern. Employers should update payroll systems and ensure employee communications reflect the new rates.
Taxation of Termination Payments
The government has confirmed its intention to reform the tax and National Insurance treatment of termination payments. While the details are still being finalised, the direction of travel suggests a tightening of the current rules, with employer NICs likely to be introduced on certain elements of compensation.
For businesses managing restructures or redundancies in 2017, it will be important to understand how these changes could affect costs.
EU Employment Law – What Next?
Following the Brexit vote earlier this year, many employers are wondering what will happen to UK employment law in the longer term. For 2017, the key message is stability. The UK remains part of the EU until exit negotiations are complete, and no immediate changes are expected to TUPE, working time rules or discrimination law.
However, it’s sensible to keep a watching brief, as political and regulatory discussions will evolve throughout the year.
Final Thoughts
2017 is set to be another year of change, and it’s important that organisations revisit their policies, budgets and HR planning early. As always, clarity and preparation make the biggest difference.
If you’d like support navigating any of these updates, or you want to sense-check how prepared your business is, our team is here to help.
