Coming up soon: 5 employment law developments to watch.
We confirm five key developments to watch, of which you should be aware.
1. Pay slip changes imminent
Two new pieces of legislation have been laid before Parliament which will introduce changes to the pay information employers must provide to staff. The Employment Rights Act 1996 (itemised pay statement) Order 2018 will bring into force the Government’s commitment in it’s response to the Taylor Review to require employers to itemise payslips to show the number of hours paid for, where a worker is paid on an hourly rate basis. Different figures must be provided where an employee is paid a different rate of pay for different types of work. Separately, the Employment Rights Act (itemised pay statement) (Amendment) (No 2) Order 2018 will implement another of the Government’s promises following the Taylor Review, to oblige employers to provide itemised payslips to all workers not just employees. All workers will be able to enforce this right to an itemised payslip in the Employment Tribunal. Both sets of changes are due to come into force on 6 April 2019.
2. Gender pay gap reporting: Mandatory reporting date approaching
The deadline for organisations with over 250 employees to provide their gender pay gap data is fast approaching. Public sector employers must publish by 30 March 2018 and private sector employers by 4 April 2018. We know that many of you have already published or are working on your figures. However, we are aware that a number of employers have been surprised to receive a letter from the Government Equalities Office, threatening to ‘name and shame’ relevant employers who have not yet registered on the Government’s database, despite the deadline still being a number of weeks away. As expected, the media has kept a close eye on the numbers published by larger organisations, which have attracted significant press attention. For example, travel company TUI found itself in the spotlight when it revealed the largest gender pay gap of any organisation to publish so far, with men earning over 50% more on average than their women. The company states that this is due to the fact that women are underrepresented in its highest paying roles, such as pilots or senior engineers. Meanwhile, attention has been drawn to the unlikely figures produced by a number of (mostly smaller) organisations which have come up with a statistically improbable exact correlation in pay between the genders. If you need any help to finalise or explain your organisation’s gender pay gap figures, please do get in touch.
3. Statutory payments: New rates and limits
It has been confirmed that statutory redundancy pay will rise again from April 2018. If you are currently planning any redundancy exercises where the date of termination will fall on or after 6 April 2018 it is important to notes that the maximum amount of a week’s pay for the purposes of the statutory calculation will jump by £19 from £489 to £508. This brings the largest possible statutory redundancy payment to £15,240, which may result in significant additional cost, if you have a large scale reorganisation or restructure in progress.
The rate of the National Minimum Wage will also increase imminently. From 1 April 2018, the standard adult rate (for workers aged 21-24) will be £7.28. The statutory National Living Wage for workers aged 25 and over will be £7.83.
From 1 April 2018, Statutory Maternity Pay will go up to £145.18 (from £140.98). From the same date, the rate of Statutory Sick Pay will rise to £92.05 (from £89.35).
4. Changes to the taxation of termination payments
An important change is imminent to the tax treatment of employment termination payments, as part of the Government’s objective to ‘simplify and tighten’ the current regime. Where both termination and payment occur on or after 6 April 2018, all payments in lieu of notice (PILON) will be subject to income tax and employee Class 1 NICs regardless of whether there is a PILON clause in the contract of employment. This may impact on termination agreements that you are considering or negotiating now. Read more here
5. A new focus on Shared Parental Leave?
Many of you have told us that, despite HR efforts to put together an attractive SPL package and promote shared leave to your staff, take up has been limited. This reflects the national picture; with research suggesting that take up may be as low as 2% of eligible parents. In an attempt to change this, the government has launched a £1.5 million campaign "Share the Joy" to improve parents’ awareness of their SPL entitlement, through advertising on social media and on commuter routes. Recognising that the SPL regime can be difficult to navigate and understand, a new website providing detailed information and guidance will be launched, together with tools to help parents check their eligibility, plan their leave, and supply the correct information to their employer. It will be interesting to see if this initiative leads to an increased uptake in real terms, or at least to an increase in employee enquiries about SPL.
Separately, the Shared Parental Leave and Pay (Extension) Bill 2017-19, a private members bill sponsored by Tracy Brabin MP, is being considered by the House of Commons. The Bill proposes to extend the availability of SPL to workers and the self-employed, as well as to employees. It is rare for private members bills to make it onto the statute books but, against the background of the new awareness campaign and focus on the rights of ‘gig-economy’ workers arising from the Taylor Review, this is definitely ‘one to watch’.