As we enter British Summer Time, there are always a number of changes which affect employees and employers and this year is no exception. You should be aware of the following changes:
National Living Wage and National Minimum Wage
From 1 April 2017, the national living wage for workers aged 25 and over increases from £7.20 to £7.50 per hour. The following national minimum wage increases will also take effect from that date:
• the rate for workers aged 21 to 24 increases from £6.95 to £7.05 per hour;
• the rate for 18 to 20-year-olds increases from £5.55 to £5.60 per hour;
• the rate for 16 to 17-year-olds increases from £4.00 to £4.05 per hour;
• the apprentice rate increases from £3.40 to £3.50 per hour; and
• the accommodation offset increases from £6.00 to £6.40 a day.
From 1 April 2017, an offence of wrongly advertising work as a statutory apprenticeship comes into force. Section 25 of the Enterprise Act 2016 creates an offence where, in the course of a business, a person providing or offering a course or training wholly or partly in England describes it as an apprenticeship when it is not in actual fact a statutory apprenticeship. If you are an employer offering apprenticeships, you are strongly advised to ensure the apprenticeships you offer meet the statutory requirements.
In addition, the calculation and payment of the apprenticeship levy through PAYE, alongside income tax and national insurance contributions will take effect from 6 April 2017. Under the apprenticeship levy rules, UK employers with an annual pay bill of or over £3 million will be required to pay an apprenticeship levy at a rate equivalent to 0.5% of their payroll costs. Employers will receive an allowance of £15,000 to offset against their levy payment. Employers in England that pay the levy will be able to access funding through a digital service which is expected to open from 1 May 2017.
Statutory payments and compensation limits
From 2 April 2017, the standard rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will rise from £139.58 to £140.98 per week (or 90 per cent of the person’s average weekly earnings if lower). In addition, the standard rate of statutory sick pay will increase from £88.45 to £89.35 per week with effect from 6 April 2017.
Changes to Employment Tribunal compensation limits come into force on 6 April 2017 when the maximum compensatory award for unfair dismissal will rise from £78,962 to £80,541. The maximum amount of a week’s pay used to calculate statutory redundancy payments and the basic award in unfair dismissal claims will rise from £479 to £489.
by Jennifer Platt