Despite Brexit being likely to take up most of the government’s time, for at least another 12 months, there is plenty set to change in the world of employment law this year which will affect both individuals and organisations. So, don’t get caught out, here’s our quick guide to things to look out for in 2018 – diaries at the ready!
Increase in the national minimum wage
The national living wage rate for those over 25 will increase from £7.50 to £7.83 on 1 April. All other national minimum wage rates will also increase. The Government has pledged that from 2020 the national living wage will be 60% of median wages which is forecast to be £8.56 an hour.
Increase in statutory payments
Also in April, the prescribed weekly rate for statutory maternity, paternity, adoption or shared parental pay will increase to £145.18. Statutory sick pay will also increase to £92.05 per week from 9 April.
Deadline for publication of employers’ first gender pay reports
The first gender pay reports for large private and voluntary sector employers with 250+ employees must be published by 4 April, for large public sector employers the deadline is 31 March. Employers must publish their reports on their websites and keep them there for three years. The required data must also be uploaded to a Government website. Employers must report substantial information including the differences in mean pay, median pay, mean bonus pay and median bonus pay between male and female employees.
Childcare voucher scheme closes to new entrants
The current childcare voucher scheme offered by some employers will be closed to new entrants on 6 April. Existing participants can remain in the scheme as long as their employer continues to operate it. From that date new parents will only be able to join the new, centrally run tax-free childcare scheme. This currently applies to parents of children under 6 but when fully rolled out will apply to parents of children under 12. The government tops up every £8 paid into a tax-free childcare account by £2, up to £2,000 a year. The money must be spent on childcare costs.
Changes to the taxation of PILONs and termination payments.
From this April, all payments in lieu of notice (“PILON”) made on the termination of employment will be both taxable and subject to national insurance regardless of whether there is an express PILON clause in the contract of employment. All employees will pay these charges on the basic pay they would have received if they had worked their notice in full (even if they don’t in fact do so). Currently, non-contractual PILONs may not be subject to tax or national insurance.
It was previously announced that employer National Insurance Contributions would be payable on termination payments above £30,000 – potentially making these more expensive for employers, or less lucrative for individuals (depending upon the negotiated position) from this April. However, this will now NOT be happening until April 2019. The existing exemption allowing the first £30,000 of compensatory termination payments to be paid tax-free will remain after this date.
Significant changes to data protection law
We will see the biggest shake-up to data protection law in a generation when the EU General Data Protection Regulations applies in the UK on 25 May. The Data Protection Bill is expected to be in force by the same date and will replace the current Data Protection Act 1998. New requirements to and significantly increased fines will see employers having to invest significant resources to ensure compliance. Contracts and policies should be reviewed and updated privacy notices, explaining what data is collected and how it is used, given to staff and job applicants.
More rights for casual workers/clarification of worker status?
The Taylor Review into employment status and zero hours workers was published in July 2017. The Government is still reviewing its recommendations but, it is likely that we will see some policy announcements about changes to the law aimed at better protecting those who are not “employees” later in the year. This will be highly relevant for those in the “gig economy” or working on zero hours contracts so, watch this space!
If you have questions about how these changes will affect you, either as an employer or an employee, speak to one of our employment law experts today.