Welcome to the HCHR HR & Employment Law April 2018 Newsletter.
This newsletter details the statutory pay rate increases which come into force this month, an update on gender pay gap reporting, a summary of taxation of PILONS and termination changes, guidance on the new GDPR legislation which comes into force this May along with employment law developments expected this year.
April 2018 Statutory Rate Increases
The National Minimum Wage (NMW) is the minimum pay per hour most workers under the age of 25 are entitled to by law. These along with the National Living Wage have increased this month as follows:
- Workers aged 25 and over: £7.83 an hour (National Living Wage)
- Workers aged 21 and over: £7.38 an hour
- Development rate for workers aged 18-20: £5.90 an hour
- Young workers rate for workers aged 16-17: £4.20 an hour
- Apprentice rate: £3.70 an hour
- Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from April.
- Statutory sick pay (SSP) is due to rise this month from £89.35 to £92.05.
- The lower earnings limit will rise from £113 to £116.
Gender Pay Gap Reporting
Private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish information about the differences in pay between men and women in their workforce, based on a pay bill ‘snapshot’ date of 5 April 2017, under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. The first reports must be published by 4 April 2018.
The Equality and Human Rights Commission has launched a consultation, closing on the 2 February 2018, on proposals to enforce the reporting requirements (see above).
Taxation of PILONS and Termination Changes
The government plans to make changes to the taxation of contractual and non-contractual PILON (pay in lieu of notice) payments. The proposals include:
- removing the distinction between contractual and non-contractual PILONs so that all PILONs are taxable and subject to Class 1 NICs
- maintaining the first £30,000 of a termination payment as exempt from income tax
- keeping any payment solely related to the termination of employment free of employee NICs
- aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax).
The government intended to make all these changes in April 2018, but has now decided that changes to the treatment of employers’ NICs on termination payments will be delayed by a year until April 2019.
Are you GDPR Ready?
60% of businesses have said that they are not prepared for their obligations under the new regime for data protection set out in the EU General Data Protection Regulation (GDPR), which will come into force on 25 May 2018.
According to a report by software technology firm Senzing, three in five of organisations are not “GDPR ready”, with 39% of UK-based directors being unsure if they would be GDPR-compliant by the 25 May 2018.
The General Data Protection Regulation (GDPR) applies to all EU Member States, including the UK, from 25 May 2018.
The GDPR strengthens existing data protection rules through a number of measures, including:
- an expansion of individual data protection rights, including the right to be forgotten
- toughening the rules on individual consent to processing sensitive data
- shortening the time scale for responding to ‘subject access requests’ from 40 days to one month, and removing the £10 fee
- requiring organisations to report any data breaches which ‘risk the rights and freedoms of the individual’ to the regulatory authority and, where there’s a high risk of this, to the individual affected as well.
Breaches of the GDPR may lead to fines of up to 20 million Euros or 4 per cent of global turnover, whichever is the greater. Enforcement of the new rules rests with the Information Commissioner’s Office (ICO).
On 13 September 2017, the government introduced a new Data Protection Bill which will:
- set new standards for protecting general data in accordance with the GDPR, while retaining certain UK exemptions
- replace the UK’s existing Data Protection Act 1998
- implement the EU’s law enforcement directive (concerned with the prevention, detection and prosecution of criminal offences).
The ICO recommends reading the GDPR alongside the Data Protection Bill, because the regulation has direct effect in the UK while the Bill pulls in matters not covered by the regulation.
HCHR will also be running breakfast briefings this month and invite you to come along for a coffee and a chat about how you’re preparing for the GDPR.
Grandparental leave was expected to be introduced in 2018. A consultation to extend Shared Parental Leave and Pay to working grandparents was expected to take place in May 2016, but was delayed due to the EU referendum. There has been no further announcement from the government in relation to whether this policy will advance.
This is just a snapshot of some of the more important changes to employment law that businesses will be facing in 2018.
If you think that your business may require additional HR support to rise to these challenges, don’t hesitate to get in touch with us by calling the number below.
If you are looking for HR advice or information about workplace mediation, disciplinaries, employee handbooks, redundancies, recruitment, and much more, then don’t forget that HCHR offer a FREE ½ hour phone consultation to all interested parties.
Get spring off to a great start by making a quick phone call to HCHR to find out if you are on the right track.
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The HCHR outsourced service could be the solution for you.
We have a team of dedicated, qualified HR professionals who are able to offer HR support in all HR areas.
The benefits of an outsourced HR function include:
• Cost savings in terms of benefit costs
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• Continuous, ongoing support
If we can be of help on any of the topics included in our newsletter or any other HR related matters, please call the team on 01792 234761.