April 2018 was an important time for businesses with changes to employment law coming into effect. The big change everyone is talking about is the introduction of the General Data Protection Regulations (GDPR), which come into force on the 25th May. For employers this means, among many other tasks, reviewing contracts and issuing employees with updated privacy notices. It’s a big job, but not the only change to look out for, here are five others.
- Gender pay gap reporting
If you have a company with 250+ employees, you’ll already be aware of this change given that the first reporting deadline has passed. But if not, it is now mandatory for companies with 250+ employees to publish an annual report detailing the differences between mean and median pay and bonuses between men and women. The report must also include the proportion of men and women receiving bonuses and the proportion of each in each quartile of the organisation. Results, which must be released by the 31st March for public sector organisations and 5th April for businesses and charities, are to be published on the company website and a government website; more information is available
here.
- National Living Wage and minimum wage increases
Both the National Living Wage and the National Minimum Wage have increased, changing the hourly rate companies are obligated to pay their employees. The changes are as follows:
Previous rates
April 2018 rates
National Living Wage - 25 yrs +
£7.50
£7.83
National Minimum Wage
24 yr olds
£7.05
£7.38
18 – 20 yr olds
£5.60
£5.90
16 & 17 yr olds
£4.05
£4.20
Apprentices
£3.50
£3.70
- Change to statutory pay rates
The National Living Wage and National Minimum Wage are not the only increases to look out for; statutory pay rates have also risen. From the 1st April, maternity, paternity, shared parental leave and adoption pay rose to £145.18 per week from £140.90 and on the 6th April, statutory sick pay increased to £92.05 per week from £89.35.
- Taxation of termination payments
To clarify the taxation of termination payments, the rules have changed. As of the 6th April, all Payments In Lieu of Notice (PILON) are now taxable regardless of whether they are contractual or not; previously tax on PILONs was dependent on employee contracts. This means that employees now pay tax and Class 1 National Insurance Contributions on the basic pay they would have received if working their notice. The £30,000 tax exemption that enables employers to pay £30,000 tax-free remains in place though, so termination payments now need to split into taxable and non-taxable income.
- Change to employment tribunal payouts
In 2017 employment tribunal fees were abolished and as such, there has been a dramatic rise in the number of claims. This April sees further changes, with an increase in the maximum payout limit, which rose from £80,541 to £83,682. The maximum amount payable is now either £83,682 or the equivalent of 52 weeks’ pay, whichever is lower.
