HR teams will be well aware of the gender pay gap reporting obligations being introduced from April for large employers. Other important changes include the increased national minimum wage and statutory rates; the introduction of the immigration skills charge and apprenticeship levy; and reforms to the IR35 regime and facility time in the public sector.
Gender pay gap reporting
The gender pay gap regulations came into force on 6 April. Private and voluntary sector employers with 250 or more employees on 5 April in any year will have to publish a gender pay gap report. Reports must be published on the employer's and a government website, the first ones due by 4 April 2018.
A gender pay gap report must cover hourly rates and bonus pay and show the difference between the mean and median rates for male and female employees; and the proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands.
Pay data must be based on a 'snapshot' date of 5 April each year. Bonus information must cover the preceding 12 month period.
Mandatory gender pay gap reporting has also been introduced for the public sector in England with a 'snapshot' date of 31 March. The first public sector reports will therefore be due by 30 March 2018. Scottish public authorities with at least 20 employees already have to publish certain pay gap information but are not covered by the new mandatory gender pay gap reporting requirements.
The Workbox page on gender pay gap reporting has detailed guidance on how to make gender pay gap calculations and publish a report. Also, have a look at our blog on gender pay gap reporting: 5 tricky issues.
National minimum wage
The national minimum wage rates increased from 1 April:
- National living wage (workers aged 25 and over) - £7.50 (from £7.20);
- Standard adult rate (workers aged 21 - 24) - £7.05 (from £6.95);
- Development rate (workers aged 18 - 20) - £5.60 (from £5.55);
- Young workers rate (workers aged 16 and 17 who are not apprentices) - £4.05 (from £4.00);
- Apprentice rate (apprentices under 19, or aged 19 or over and in the first year of the apprenticeship - £3.50 (from £3.40).
The Scottish Agricultural Wages Board has agreed a new single minimum hourly rate of £7.50 to apply from 1 April to all agricultural workers irrespective of age and duties.
Find out more about the minimum wage on Workbox.
- From 2 April statutory maternity, adoption, paternity and shared parental pay will increase from £139.58 to £140.98 per week;
- Statutory sick pay will be £89.35 per week since 6 April, up from £88.45;
- On 6 April the limit on a week's pay for calculating statutory redundancy pay and unfair dismissal basic awards will increase from £479 to £489;
- The maximum compensatory award will be the lower of £80,541 or 52 weeks' gross pay in respect of dismissals with an effective date of termination of 6 April or later (up from £78,962).
Workbox users always have access to the current up-to-date rates on the Statutory Rates page.
Immigration skills charge
Effective since 6 April an immigration skills charge will be due when sponsoring a skilled worker from outside the EEA under Tier 2. The charge applies to the sponsor, not the individual, and is set at an annual rate of £1000 with a reduced rate of £364 for charities and small businesses. There are a number of exemptions, for example for specified PhD level occupations and skilled workers already with leave to remain in the UK.
An apprenticeship levy was introduced for businesses on 6 April. It will be charged at 0.5% of annual pay bills but the allowances available mean that it will only be payable on pay bills over £3 million in any tax year. It will be calculated, paid and reported to HMRC via PAYE.
In England, there will also be a new system of digital apprenticeship service accounts which will be used to pay for training and assessment.
Workbox users can find out more here on how the levy will be administered and what it will be used for.
IR35 regime in the public sector
IR35 is designed to ensure that individuals providing services via an intermediary (such as a personal service company), who would have been taxed as employees if they had been engaged directly, pay employment taxes on their income. Currently, the intermediary is responsible for determining whether IR35 applies, and for paying tax.
However, the government believes there is widespread non-compliance with the current legislation. So, changes came into force on 6 April, meaning that public sector bodies will be responsible for deciding whether the IR35 rules apply.If they do, the public sector body (or third parties such as employment agencies, outsourcing companies and consultancy firms) will be responsible for calculating, reporting and paying tax and national insurance contributions (including employer's national insurance).
These changes do not apply to individuals or personal service companies providing services to private sector organisations.
For more, see Taxation: Employees, Consultants and others.
Facility time in the public sector
Regulations came into force on1 April which require relevant employers with at least 50 employees in the public sector to publish information on 'facility time' (i.e. the time take off from a job toenable a representative tocarry out their trade union role).The first reports will cover the 12 month period from 1 April 2017 and include details of the number of union officials and the percentage of time and pay bill spent on facility time. Look out for our blog on what this will mean in practice for public sector employers.
Please get in touch if you would like more information on any of the changes. If you're interested, have a look at the Workbox home page where you'll find a short information video, or speak to your usual Brodies' contact to discuss a free trial or subscription options.