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2017 will see some major employment law changes that will impact many businesses.

Apprenticeship levy

The apprenticeship levy took effect from 6 April 2017 and aims to raise the amount invested in apprenticeships to £2.5 billion by 2020 to address the critical need for millions of new, technical and professional skilled workers. The levy is only payable on annual payroll bills in excess of £3 million and requires these businesses to pay 0.5% of their annual wage bill.

Every business is entitled to a £15,000 allowance to offset against the levy. However, if a company is part of a group, the group will only receive one £15,000 allowance, but they can decide how to split this between all of the companies.

Gender pay gap reporting begins

Large employers with 250 employees or more will have to publish information on their gender pay gap for the first time.

Employee pay and bonuses, as well as the number of men and women in each quartile of the company’s payroll, will need to be reported annually. Initial reports must also include pay and bonus figures from a snapshot pay period that includes 5 April 2017.

This data will need to be published by 4 April 2018 on both the company’s and a government website, where it will remain for at least three years.

National minimum wage increases

The national minimum wage has increased again, despite some of these already being increased on 1 October 2016.

The new rates are as follows:

  • National living wage for those aged 25 and over – £7.50 per hour
  • Standard adult rate for those aged 21 and over – £7.05 per hour
  • Development rate for those aged 18 to 20 – £5.60 per hour
  • Young worker rate for those aged 16 to 17 – £4.05 per hour
  • Apprentice rate – £3.50 per hour.

Salary sacrifice arrangements

Where benefits are being provided to employees in exchange for a reduction in their salary, known as a salary sacrifice scheme, the tax and national insurance advantages are being reduced.

From April 17, income tax and class 1A national insurance will be levied on the greater of:

  • The amount of earnings the employee would have received if they have not taken the benefit
  • The taxable ‘cash equivalent’ value of the benefit under the current valuation procedures.

Certain benefits, such as pensions, childcare and cycle2work schemes are exempt from the new guidelines. Additionally, schemes in place prior to April 2017 will be protected until April 2018, and any arrangements relating to company cars, accommodation and school fees are protected until April 2021.

Please contact Michael Burgess on 01782 279615 if you have any questions on these employment law changes.


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