News & Views

April shower of employment law changes

FLM
BY Fiona McBeath
Employment law

April is traditionally a busy time for employment-related changes, and this year is no different with a number of key legal amendments due to come into force in the first week of the month. Here’s a quick roundup of what you need to know.

Childcare vouchers: until very recently the government was on-track to fully implement its new state-administered childcare benefit scheme and to require the closure of employer-administered childcare voucher schemes to new entrants. The original plan was that the closure of existing schemes would take effect from April. However, on 13th March the government announced that existing schemes could continue to accept new entrants for a further six months until October 2018.

Taxation of notice payments: from 6th April all payments in lieu of notice (PILONs) will be subject to income tax and NICs regardless of whether there is a contractual right to make a PILON. This includes termination payments in settlement agreements where a “global” payment is made and notice is not separated out within the agreement. In those circumstances, HMRC would expect that a portion of the payment equivalent to what should have been notice is identified and taxed appropriately. HMRC has indicated that the rules will only affect terminations in which both the dismissal and the payment occur post-6th April, so any organisation wishing to make use of existing tax-efficient arrangements may wish to do so prior to the 6th April.

Gender pay gap reporting: from 4th April all private sector and voluntary sector employers with more than 250 employees must publish their first gender pay gap report on their websites and upload them to the government’s reporting website. For public sector organisations the deadline is 30th March.

Public sector equality duties: From 1st April specified public authorities will be required to have regard to those suffering socio-economic disadvantage when making policy decisions. The duty requires organisations to act in a manner that reduces such disadvantage and removes inequalities of outcome.

Statutory payment increases:

 

SMP, SPP, ShPP, SAP*

SSP**

Week’s pay***

Compensatory Award****

Old rate

£140.98

£89.35

£489

£80,541

New rate

£145.18

£92.05

£508

£83,682

 

*      weekly rate of statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory adoption pay.

**     weekly rate of statutory sick pay.

***   the statutory limit on a week’s pay for the purposes of calculating redundancy pay and the basic award in unfair dismissal claims.

****  maximum compensatory award in unfair dismissal claims.

 

In addition, the various hourly rates of NMW/NLW will increase as follows:

 

Age 25+

Age 21-24

Age 18-20

Age 16-17

Apprentice

Old rate

£7.50

£7.05

£5.60

£4.05

£3.50

New rate

£7.83

£7.38

£5.90

£4.20

£3.70

 

Discrimination awards: the method of calculating injury to feelings awards in discrimination claims has long been by categorising the severity of the action within three broad bands, known as the “vento bands” after the case in which they were first formulated. The financial level of each band is reviewed periodically to take account of inflation, and the most recent review is due to take effect from 6th April. Any successful claims raised after that date will be subject to the following guidelines:

 

Low Band

Middle Band

Upper Band

Description

For one off or less serious acts of discrimination

For more serious cases that do not merit an award in the upper band

For serious acts, including lengthy and / or systematic campaigns of discrimination

Old rate

£800 - £8,400

£8,400 - £25,200

£25,200 - £42,000

New rate

£900 - £8,600

£8,600 - £25,700

£25,700 - £42,900

It will continue to be possible for a tribunal to issue an award in excess of the upper band should it be merited.

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