Significant changes to employment law will come into force next year. From gender pay gap reporting to the apprenticeship levy, here are some of the key changes for 2017:
Trade union balloting
The start date for changes to union balloting for industrial action will be announced next year. The changes will mean that a vote for action will need a 50% minimum turnout and a majority vote in favour of industrial action. For important public services (such as health, education, fire and transport), 40% of eligible voters will need to vote in favour of the action. New regulations are due to come into force on 1 March 2017, or, if Parliament has not approved them by that time, 21 days after approval.
Apprenticeship levy on large employers introduced
From 6 April 2017, all employers with an annual wage bill of £3 million or more will have to pay a 0.5% levy on their total pay bill. These employers can access levied amounts (and a government top-up of 10% if they spend all of their levy), to pay for apprenticeships in England. Smaller organisations not required to pay the levy can contribute 10% towards the cost of an apprenticeship and the government will pay the rest.
Salary sacrifice schemes dropped
Some salary sacrifice schemes will no longer continue to offer the same savings on tax and National Insurance contributions after 6 April 2017. Pension savings, childcare and cycle-to-work schemes will be unchanged. Schemes for other benefits (such as private medical insurance, gym membership, IT equipment etc) arranged before April 2017 will be able to continue until April 2018. Long-term arrangements relating to cars, accommodation and school fees can continue until April 2021.
General Data Protection Regulation compliance
Employers should start preparing for the EU General Data Protection Regulation (GDPR) which is due to come into effect in May 2018. This may require amendments to policies and procedures relating to subject access requests, responses to any breach of the DPA and privacy notices. In addition, employee will need to check that personal data kept about employees meets GDPR conditions for employee consent. Organisations face fines of up to €20 million or 4% of annual global turnover (whichever is the greater) if they do not comply.
The start of gender pay gap reporting
Private and voluntary sector organisations employing 250 or more people must publish the details of their gender pay gap by 4 April 2018. Employers will need to use data from 2016/17 for the first reports.
Changes to rules for employing foreign workers
Employers sponsoring foreign workers holding a tier 2 visa will have to pay an immigration skills charge of £1,000 per employee from April 2017 (£364 for smaller employers and charities). The immigration skills charge will be on top of the fees for visa applications. The minimum salary threshold for experienced workers applying for a tier 2 visa will also increase to £30,000 – this is expected to be in April 2017. Transitional arrangements will apply to those who already have leave to remain under Tier 2 (General) and those who applied before 25 November 2016.
Public sector exit payments restricted
Public sector exit payments are expected to be restricted from next year. This will result in a cap of £95,000 on payments to public sector employees for loss of employment including any redundancy pay, voluntary exit payments or other payments made due to loss of employment. In addition, a separate measure that is now in place requires employees who earn over £80,000 to repay some or all of their exit payment if they return to a public sector role within 12 months.
National minimum wage changes
The national living wage for employees aged 25 or over will rise to £7.50 for pay periods on or after 1 April 2017. There are also smaller increases to the other national minimum wage rates.