April is the month when changes to employment legislation come into force, meaning it’s a busy time for employers and HR professionals. This year is certainly no exception, with April anticipating a range of new laws that businesses of all shapes and sizes need to be aware of.
From small changes to more significant legislations, here are the important changes coming into force this month, as reported by Personnel Today:
1. Gender pay gap reporting
The most significant change is that employers with 250+ employees will be legally obliged to report their gender pay gap data, including bonuses. The proportion of male and female employees in different pay quartiles and who receive bonuses will also have to be reported. Pay data must be based on a ‘snapshot’ date of 5 April for private and voluntary sectors, and 31 March for the public sector, with bonus information based on the preceding 12 months.
2. Apprenticeship levy
The apprenticeship levy came into force on 6 April 2017. It’s designed to fund apprenticeship training; employers with a paybill of more than £3 million must pay the monthly levy via PAYE. They will be able to access this through a digital service, which will operate from 1 May.
3. Immigration skills charge
Companies who sponsor skilled workers under tier 2 of the immigration points-based system will be required to pay a levy of £1,000 per certificate of sponsorship per year. This will be £364 for small businesses and charities. It applies to every worker under tier 2, though there are some exceptions. This charge came into force on 6 April.
4. Restricted tax advantages under salary sacrifice
Employee benefits and salary sacrifice schemes that bring tax and NIC advantages will be limited as of this month. Arrangements already in place will be protected until April 2018, or April 2021 in some cases.
5. IR35 reforms in public sector
The intermediaries rules (IR35) applies to individuals who supply a service to a client via an intermediary, such as a personal service company. The rules apply if they could be deemed as an employee with the intermediary; the intermediary must deduct income tax and NI contributions on wages and salary paid to that individual. This will apply to payments made from 6 April.
6. Higher national minimum wage
Starting from 1 April 2017, national minimum wage rates will increase to bring them in line with the annual national living wage rate increase for workers aged 25 and over. The rate for this group will rise from £7.20 per hour to £7.50.
7. Increased sick pay and family-related pay
The weekly statutory sick pay rate will increase to £89.35 from 6 April, while the weekly statutory maternity, paternity, adoption and shared parental pay rates will increase to £140.98 for pay weeks commencing on or after 2 April 2017.
8. Pensions advice allowance
As of 6 April 2017, those in defined contribution and hybrid pension schemes will have a £500 tax-free amount added to their scheme, to be redeemed against financial advice.
9. Increased statutory redundancy pay
From 6 April, employers that make employees redundant must pay those with two years’ service a total based on the individual’s weekly pay, age and length of service. Weekly pay is subject to a maximum amount of £489, up from £479.