Employment law changes anticipated for 2017

A round up of the employment law changes anticipated for 2017, amid the ongoing uncertainty resulting from the Brexit referendum. 

Large compliance projects for data protection and gender pay gap reporting will dominate the HR agenda in 2017.

Employers are likely to see costs increase as the apprenticeship levy and additional fees for sponsoring foreign workers are introduced, and tax savings for employee benefits are significantly reduced.

Now more than ever it is important to ensure you are have good up-to-date HR practices and are employing the right people on the right terms and conditions.

  1. Data Protection Regulation compliance efforts underway

Although the EU General Data Protection Regulation (GDPR) does not come into force until May 2018, the scope of the changes under the new Regulation means that preparing for the GDPR will be high priority for employers in 2017.

Employers will need to carry out audits of employee personal data that they collect and process to ensure that it meets GDPR for employee consent. New governance and record-keeping requirements mean that employers will also have to create or amend policies and processes on privacy notices, data breach responses and subject access requests.

As the GDPR will come into effect before the UK exits the EU, organisations that are not compliant by May 2018 will risk fines of up to 20 million euros or 4% of annual worldwide turnover, whichever is higher.

  1. Gender pay gap reporting begins

Private-sector, voluntary sector and public-sector organisations with 250 employees or more will be required to publish gender pay gap information for the first time.

Employers will be obliged to release information relating to employee pay and bonus pay, as well as information on the number of men and women in each quartile of the organisation’s pay distribution.

Gender pay gap regulations for private and voluntary sector employers are still in draft form but the deadline for the first report is expected to be 4 April 2018, based on pay and bonus data from 2016/17.

Reporting requirements for public-sector employees are expected to mirror private-sector timelines and requirements.

  1. Apprenticeship levy on large employers introduced

Employers with an annual payroll of more than £3 million will be required to pay a 0.5% levy on their total pay bill starting on 6 April 2017.

Large employers will be able to access levied amounts, plus a government top-up of 10%, to fund apprenticeships from accredited training providers.

Smaller organisations that are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10% towards the cost of an apprenticeship, with the Government paying the remaining cost.

This is potentially great news for employers and young people entering the workforce.

  1. Salary-sacrifice schemes significantly restricted

Employers may need to reconsider their benefit offerings as tax savings through many salary-sacrifice schemes will be abolished from 6 April 2017.

Schemes related to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars will not be affected.

Schemes in place prior to April 2017 will be protected until April 2018, while arrangements related to cars, accommodation and school fees will be protected until April 2021.

  1. Changes to rules for employing foreign workers 

Employers sponsoring foreign workers with a tier 2 visa will be required to pay an immigration skills charge of £1,000 per worker (£364 for small employers and charities) beginning in April 2017.

The immigration skills charge will be in addition to current fees for visa applications.

In April 2017,the minimum salary threshold for “experienced workers” applying for a tier 2 visa will also increase to £30,000.

New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

  1. Restraints on public-sector exit payments are still expected

Restrictions on public-sector exit payments, which had been expected to come into force in 2016, are still anticipated, although their implementation dates have not yet been confirmed.

Exit payments will be capped at £95,000 when public-sector employees leave their roles, including as a result of redundancy or voluntary exit.

Employees earning over £80,000 will also be required to repay exit pay if they return to any public-sector role within 12 months.

This will be a key area for the National Audit Office to look at closely and ensure that further loopholes aren’t being created.  Poor practices that included raising salaries exceptionally to benefit from Defined Benefit pension schemes, offering VR to expensive senior staff who merely wished to retire as well as agreeing terms to re-hire have been costly to the public purse.

  1. National minimum wage changes 

Cycles for national minimum wage increases – including the national living wage – will be aligned, with the next round of changes taking effect on 1 April 2017.

The next increase will see the living wage for staff aged 25 or over rising to £7.50.

Use this link to check you are paying the correct rate. Also look at current and future statutory rates for maternity pay, paternity pay, adoption pay, shared parental pay and sick pay.

https://www.gov.uk/national-minimum-wage-rates

  1. Trade union balloting changes to be implemented 

Employers await the implementation date for new balloting requirements under the Trade Union Act 2016.

Under the rules, a successful vote for strike action will require a 50% minimum turnout and a majority vote in favour of industrial action.

Industrial action in important public services will require a strike vote of 40% of all eligible voters.

Happy 2017? Predictions for employers……

2016 was an eventful year and most people are now looking forward to a (hopefully) better 2017.  So, a few days into the year, what can employers look forward to over the next 12 months?

  • Brexit

After dominating the headlines in 2016, 2017 is also likely to be a year where Brexit is in the news.  Assuming that the government does what it has promised, then article 50 will be triggered in March 2017.  What Brexit will actually mean for employers and employees remains to be seen, but hopefully things will get clearer.  Updates to come, watch this space…….

  • Changes to work permits and the Immigration Act

This is hardly surprising given the current Brexit situation.  Some of the changes have already been announced and there will be doubtlessly more to come.

What we do know already is that employers sponsoring foreign workers with a tier 2 visa will be required to pay an “immigration skills charge” of £1,000 per worker (£364 for small employers and charities) from April 2017. The immigration skills charge will be in addition to current fees for visa applications.

In April 2017, the minimum salary threshold for “experienced workers” applying for a tier 2 visa will increase to £30,000.  New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

  • Gender pay gap reporting

Or the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 to give them their full name, which will come in to force on 6 April 2017.  The government published updated guidance on these regulations a couple of days ago and has confirmed that all organisations with over 250 employees need to provide and report on gender pay gap information based on the date of 5 April 2017.  If you haven’t started planning for this, make it top of your new year “to do” list.

  • Apprenticeship levy

There has been much talk about the forthcoming apprenticeship levy and the potential opportunities it brings.  If you are an organisation with a payroll of more than £3m then from 6 April 2017 the levy will apply to you.  The Government has recently published updated guidance for employers on how the apprenticeship levy and the new funding system will work.

  • Salary sacrifice schemes – RIP

As stated in the Chancellor’s Autumn Statement, there will be significant changes to what type of salary sacrifice schemes employers will be able to offer.  Some of the current items offered, such as gym membership, will be abolished from 6 April 2017.  If you haven’t already reviewed your employee benefits scheme, then now is the time.

  • Rises in the national living wage and national minimum wage

This was another announcement in the Autumn Statement.  Rather than having different dates when there are changes in the hourly rates for the national living wage and the national minimum wage, these have now been aligned.  So the next changes will be due on 1 April 2017 and the rates are set to rise.

  • Trade Union Act 2016

We are waiting to hear exactly when this legislation will come in to force but it will happen at some stage during 2017.

Under the rules, a successful vote for strike action will require a 50% minimum turnout and a majority vote in favour of industrial action.  Strike action in “important public services” will require a strike vote of 40% of all eligible voters.

  • Pensions……

There has been a lot in the news about pensions in 2016 – whether it be related to the demise of BHS or the rise in the “gig” economy.  There are already some known changes planned for 2017, such as the final phase of pension auto-enrolment to encompass all employers and the rise in the minimum employer contribution rate.  It is likely there well may be others….

We’re sure that there will be other developments during the year ahead, so keep your eye on this blog for more updates.  Happy New Year!

www.amelore.com

Brexit – Dommage or Damage?

Like many people, I’m still slightly in shock about the outcome of the EU referendum on 23 June 2016, when the majority of the British public voted for the UK to leave the European Union.  Perhaps because I’m currently and living in working in Europe, it feels a more serious reality than if I was living back in the UK.

Now the dust has settled a bit on the surprising result (yes, even those campaigning and voting for “Leave” were surprised that they had actually won), it is time to start thinking what the actual implications of the UK leaving the EU will actually mean in practise.  Lots has already been written on this, both here in this blog and across the media as a whole, but let me share with you a European perspective.

“Nothing will happen for at least two years…..”

Things are already happening…….

For UK workers currently posted in Europe and paid in sterling, rather than Euros, their actual salary has already decreased by 15% and counting.  If you employ “posted” workers you will need to think how you can help your staff to still feel that they are earning a reasonable, fair salary now that their money is not going as far.  You will also need to be mindful of how the exchange impacts on the minimum wage of the country they are working in and whether you are still legally complying with it.  (for example in France the minimum hourly rate is currently 9.53 Euros, which is now equivalent to around £8.20 per hour rather than around £7.33 pre-Referendum.)

The tourism industry is already feeling the impact, with potential UK holiday makers deciding maybe they won’t holiday in Europe this year after all.  The area I am working in France is already feeling and noticing this dip in potential income and bookings.  For countries like Spain or Greece where tourist numbers are even higher and their economy is also more reliant on tourism income this could be really serious.

Going forward there is also the question of whether UK citizens will be able to work easily in Europe, or whether they will need to apply for work permits.  Again, for the tourist industry and other industries that employ semi-skilled, short term staff on the local minimum wage, will it be worth their while to even employ or post UK workers to Europe anymore?

Things could also happen more quickly than in two years if some EU politicians have their way, so don’t assume that we definitely have two years grace.

Does Europe care that the UK plans to leave the EU?

In a word, “yes”!

The people I have spoken to recently about Brexit, including those working in local government, the hospitality industry and the tourist industry seem to fall in to two camps.  Those who say it is “dommage” – a shame – and those who think it will be really damaging to Europe, its economy and stability.  Even those who fall in to the “it’s a shame” corner think that things will be worse for the UK, and indirectly, for them too.

While it would be nice to think that nothing much will change and that we have time to get used to the idea of being “out” of Europe, I honestly think that the reality will be different.  As the old saying goes “be careful what you wish for…..” – it will be interesting to see whether leaving Europe is a dream come true or a nightmare.  Watch this space…..

www.amelore.com

 

So, what has Europe ever done for us…?

Karen has returned to France for the summer and here is her first blog of the season… Thoughts of how she felt before the referendum. It’s still a hot topic and will be for some time…

It’s a strange time to be back living and working in France, with the EU referendum result.  Up until last week it was always a given that, as a citizen of a fellow European Union country, that I am welcome and able to live and work here on equal terms.  How will that change after 23 June 2016?

I am not alone as a UK citizen living and working in another EU country.  In Spain alone there are over 1 million UK citizens doing something similar, many of whom have retired there.  For many people this ability to live and work in another country may not be of interest and not something that you ever see yourself doing.  But there are other working life benefits that have come from being part of the EU, some of which may feel more relevant to you.

So what am I referring to?  Let me give you a few examples………….

  • Paid paternity leave, and now shared parental leave (which is paid, rather than unpaid). Both partners / parents can now have time off to spend with their new born or adopted child, not just the mother.
  • The right not to be discriminated against because you are a parent (expectant mother, a maternity leave returner, a working parent etc).
  • Guaranteed paid holiday of at least 30 days per year (including bank holidays). Depending on your age, you may remember the days when there was no such thing or certainly a lot less paid holiday.
  • The right to be part of a trade union, should you want to be.
  • Your employer has to provide you with a safe working environment, with the personal protective equipment (PPE) to keep you safe and allow you regular rest breaks.

There are lots more examples I could cite that we take for granted, and that any good employer would do anyway to keep their employees motivated, healthy and safe, without “Europe telling them to”.

Don’t necessarily believe that all employment legislation that comes out of Europe is “bureaucratic” or Europe “interfering”.  A lot of what current UK workers, not just employees, take for granted happened thanks to Europe.

Perhaps this is something to ponder as the holiday season approaches, when you may be enjoying some paid time off in the Mediterranean sun somewhere (without the need to get an entry visa) …..