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Five changes to employment law being introduced this week

  1. Employment law changes for small businesses
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    ChrisGoodfellow

    ChrisGoodfellow Editor Staff Member

    Posts: 132 Likes: 37
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    The start of April sees a series of changes to employment law, including an increase in the national living wage and new apprenticeship funding.

    We’ve summarised the legislative changes that will affect the owners of small businesses below. Let us know if the changes have affected your business in the comments.

    1) Increase in the national living wage

    From 1 April, the national living wage increased from £7.20 to £7.50 for those that are 25 and over.

    The new rates for the other wage brackets are as follows.

    Year

    25 and over

    21 to 24

    18 to 20

    Under 18

    Apprentice

    April 2017

    £7.50

    £7.05

    £5.60

    £4.05

    £3.50

    The full government guidance on the subject can be found here.

    2) Increases to statutory sick pay and redundancy and unfair dismissal

    Lindsey Knowles, employment law specialist at law firm Kirwans, was kind enough to summarise the changes to statutory sick pay and redundancy, and tribunal proceedings:

    • Statutory sick pay will rise from £88.45 to £89.35 from 6 April. In addition, there will be an increase in the maximum amount of statutory redundancy pay, with the packages paid to employees with at least two years’ service being calculated on their length of service, age and weekly pay
    • The maximum amount of weekly pay that can be taken into account when making the calculations both for statutory redundancy pay and for the basic award for unfair dismissal will rise from £479 to £489, resulting in an increased cap on any statutory redundancy rewards from £14,250 to £14,370
    • The limit on the amount employment tribunals can award for unfair dismissal will also increase, rising from £78,962 to £80,541

    In each case, the link will take you through to the government guidance on the subject.

    3) Sponsoring skilled non-EEA workers will become more expensive

    Legislation that comes into force on 6 April means that you may be required to pay the Immigration Skills Charge when you sponsor a worker from outside the European Economic Area.

    The skills charge will be £1,000 per year for medium or large sponsors, and £364 per year for small businesses (defined as an annual turnover less than £10.2 million and fewer than 50 employees) or charitable sponsors. The fee is payable upfront and for the total period of time covered by the sponsorship.

    The full impact of the Immigration Act 2016 is explained here.

    4) Government support for apprenticeship schemes

    If you’re an employer with a pay bill over £3m per year you will have to pay the apprenticeship levy from 6 April 2017.

    Employers who don’t pay the levy will be able to share the cost of training and assessing their apprentices with the government (what they’re calling “co-investment”). This means that from May 2017 you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%) as long as it does not exceed the maximum funding band for your industry.

    5) Increase in statutory payments for maternity pay

    Statutory Maternity Pay (SMP) is paid for up to 39 weeks. From April 2017, employers have to pay:

    • 90% of the employee’s average weekly earnings (before tax) for the first six weeks
    • £140.98 or 90% of the employee’s average weekly earnings (whichever is lower) for the next 33 weeks

    The £140.98 benchmark is a marginal increase of 1% on the previous level. Read the full government guidance here.

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