April is the time of year when certain employment law changes come into effect. It’s important to ensure that your business is up to date with legislation. This can be difficult, especially if you don’t have an HR department. Highlighted here are some current and soon to be implemented changes that might affect your business.
Pensions and Auto-Enrolment Minimum Contributions
It’s important to remind your staff that this month, there will be a mandatory increase in contributions. Employers will need to contribute a minimum of 2%, and employees 3%, providing a total minimum contribution of 5% per month.
Most years, the Department for Work and Pensions proposes new rates for statutory payment in line with the Consumer Price Index. This year, 2018, the rates are as follows:
- Statutory Maternity Pay (SMP) – paid at a rate of 90% of the employee’s average weekly earnings for the first six weeks, the remaining 33 weeks are paid at the statutory rate (or at 90%, whichever is lower). From 1 April 2018, the statutory rate increased from £140.98 to £145.18 per week.
- Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP) and Statutory Shared Parental Pay (ShPP) – will also increase from £140.98 to £145.18 per week.
- Maternity Allowance – payable for those who don’t qualify for SMP payment, this will also increase to £145.18 per week.
- Statutory Sick Pay (SSP) – as from 6 April, the rate will increase from £89.35 to £92.05 per week. You can offer more if you have a company sick pay scheme, but you cannot offer less.
The amount that your employees must earn to be entitled to these rates is also increasing from £113 to £116 per week. Employees earning less than this will not be eligible.
National Living Wage (NLW) and National Minimum Wage (NMW) rates
As from 1 April 2018, the minimum hourly rates have increased slightly to the following:
- NLW for employees aged 25 and over increased from £7.50 to £7.83
- NMW for those aged 21-24 increased from £7.05 to £7.38
- NMW for those aged 18-20 increased from £5.60 to £5.90
- NMW for those ages 16-17 increased from £4.05 to £4.20
- NMW for apprentices aged under 19, or over 19 but in their first year of apprenticeship, increased from £3.50 to £3.70
Changes to Tax on Payments in Lieu of Notice (PILONs)
As from 6 April 2018, an element of all payments received in connection with a termination of employment are chargeable to income tax as general earnings. Whereas previously, if you didn’t have a contractual right to make a PILON, any payment made in respect of an employee’s notice entitlement was regarded as ‘damages for breach of contract’ with the first £30,000 paid tax-free, with no NICs due. For further information on this, click here.
Employment Tribunal Maximum Awards and Limits
With immediate effect, the maximum amount of a week’s pay to calculate the basic award for unfair dismissal or a redundancy payment increases to £508. The maximum amount of the compensatory award for unfair dismissal increases to £83,682.
And finally, GDPR!
With all the publicity and hype around this topic, you are probably aware that the new GDPR – General Data Protection Regulations – come into effect on 25 May. To find out more about this from an HR point of view, read my newsletter here.
If you need advice on how any of the above relates to your business specifically, I’d be delighted to help. Do call me on 0118 940 3032 or click here to email me.