April is a fairly busy time when new changes come into force, so you need to know what they are, get prepared and decide whether you need to take action or do nothing. Forewarned is forearmed!
Here’s what you need to know:
1. National minimum/ living wage rates increase
1st April, the national minimum /living wage rates increase.
National Living Wage rate:
- For workers aged 25 or above, it rises to £7.50 p.h. (30p increase)
National Minimum Wage rates:
- Adult Rate: workers aged under 25 but at least 21 rises to £7.05 p.h. (10p increase)
- Development Rate: workers aged at least 18 but under 21 rises to £5.60 p.h. (5p increase);
- Young Workers rate: workers aged under 18 who are no longer of compulsory school age rises to £4.05 p.h. (5p increase); and
- Apprentice rate: increases to £3.50 p.h. (10p increase)
Don’t forget you need to write to your employees informing them of any pay increase that applies to them.
Statutory redundancy pay increases
From 6th April, if you have to make employees redundant, then you must pay those with two years’ service a sum based on their length of service, weekly pay, and age. Remember you need to follow a fair procedure to get to that point though!
The weekly pay is subject to a maximum amount, and this will rise from £479 to £489. No business owner wants to think that they may have to face this situation, but it pays to be prepared and know your responsibilities.
The weekly pay increase will also apply to other things such as the basic and compensatory award amounts in unfair dismissal cases, so the unfair dismissal basic award increases to £14,670 — same as the maximum statutory redundancy payment, and the compensatory award increases to £80,541 (or a years salary, whichever is lower).
Maternity Pay, Paternity Pay, Adoption Pay, Shared Parental Pay increases
The applicable statutory rate element for these rights will be increasing to £140.98 per week
Statutory Sick Pay increases
If you pay the statutory rate for any sickness absence you need to be aware that this rate will increase to £89.35 per week
Statutory Guarantee Payments
If you have to lay people off temporarily for a full day then the statutory rate increasing to £135 (£27 per day for a maximum 5 days in a 3 month period).
Gender pay gap reporting comes into force
If you employ 250 or more employees, then this applies to you. You will be required to report on your gender pay gap, including any bonuses that you might use to reward your staff.
You’ll have a period of 12 months to publish this information on your own website, and upload the details to a government website. As such, you need to make sure that you have mechanisms in place to collect the necessary facts and figures.
The immigration skills charge will be introduced
Do you sponsor skilled workers under tier 2 of the immigration points-based system? If so, you will be required to pay a sponsorship levy of £1,000 per year for each certificate of sponsorship – or £364 if you’re a smaller business or charity.
There are certain exemptions that apply, so if your business hires skilled immigrants, it pays to seek out tailored advice.
Employers with an annual payroll of more than £3m will be required to pay a 0.5% levy on their total pay bill starting on 6 April.
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.
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.
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 this April will be protected until April 2018, while arrangements related to cars, accommodation and school fees will be protected until April 2021.
Comment: Please get in touch if you need further help or advice on any of the above areas.