I am sharing a very brief summary of the keys headline changes that have caught my attention.
This is not intended as a comprehensive update, but as a prompt for further action, where appropriate.
Gender Pay Reporting
Private and voluntary sector firms with 250 or more employees are required to capture their data on gender pay at 5th April, while public sector organisations must use 31st March as their capture date. Employers then have 12 months to publish the information on the difference between mean and median hourly pay of full-time male and female staff. They will also have to report the difference between median bonus pay for male and female employees and the proportion of male and female bonuses given.
All of the following changes are effective from 6th April 2017.
Employers in England with a pay bill of £3M or more will pay 0.5% of their monthly payroll as a levy via PAYE.
Increases to the Minimum Wage
For those aged 25 and over, the national living wage increases by 30p to £7.50. There are further increases in the national minimum wage for 21-24 years olds to £7.05 per hour, 18-20 year olds to £5.60 ph, 16-17 year olds to £4.05 and the apprentice rate to £3.50ph.
Immigration Skills Charge
There will be a £1000 levy on employers per certificate of sponsorship for those businesses sponsoring skilled workers under tier 2 of the points-based immigration system. This levy is reduced to £364 for small employers and charities while the salary threshold for the tier rises to £30,000 for ‘experienced workers’.
Nurses, radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin are exempt from the increases until July 2019.
Statutory Redundancy Pay, Sick Pay and SMP, Paternity and Shared Parental Pay
The qualifying weekly pay for redundancy rises to £489and the maximum statutory redundancy pay you can get is £14,670. Employers must pay redundancy pay to those with 2 year’s service a sum based on their weekly pay, LOS and age.
SSP increases to £89.35 and to be entitled to these payments, average earnings must be equal or greater than the lower earning’s limit, which is also rising to £113. SMP, paternity, adoption and shared parental pay increases to £140.98 for weeks commencing on or after 2nd April. If the employee’s earnings are lower than the statutory rate, these rates will reduce to 90% of the employee’s earnings.
Salary Sacrifice Arrangements
Tax and NI advantages of many of the items under current salary sacrifice scheme will come to an end when they will be taxed through payroll for the first time. For plans already in place there will be some transitional arrangements until April 2018 or even 2021 for some. Pension contributions and advice, childcare and cycle to work schemes are among the benefits that remain exempt from tax.