Employment Law Changes That May Affect Your Business in 2017

As a business and an employer you need to be aware of the main changes to employment law during 2017. Below we set these out:

Increase in National Living Wage and National Minimum Wage from April 2017

On 1st April the National Living Wage for employees aged 25 and over will increase from £7.20 per hour to £7.50 per hour.  There will also be increases at the same time to the National Minimum Wage payable to those under 25 and apprentices.  A summary of these new rates are:

25 years old and over    £7.50 per hour

21-24 years old             £7.05 per hour

18-20 years old             £5.60 per hour

16-17 years old             £4.05 per hour

Apprentices under 19 or 19 or over in first year of apprenticeship £3.50 per hour

Changes to Statutory Pay from April 2017

These will be increased as follows, the first time since April 2015:

• Statutory sick pay will increase to £89.35 per week
• The flat rate for statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared paternal pay will increase to £140.98 per week.

Gender Pay Gap Reporting

6 April is the likely date the gender pay reporting regulation will come into force.

If you employ more than 250 employees as at 5 April 2017, you will be required to start collecting data from April 2017 to publish your first gender pay gap report by April 2018.

The report will need to highlight particular aspects such as the difference between the mean and median hourly rate of pay paid to male and female employees and the difference in mean and median bonus paid to male and female employees.

If you need any further clarifications on gender pay gap reporting please call Paul Stevens on

020 8290 7422.

Apprenticeship Levy

From 6 April 2017, if you are an employer with an annual payroll of more than £3 million, you will be required to make payments into a new apprenticeship levy. You will need to pay an additional sum equal to 0.5% of your total Class 1 NICS pay bill for the tax year into the new fund less the £15,000 allowance.  This levy will contribute towards the centralised funding of UK apprentices and the Government will top it up by 10%.  This will mean that there will be more funding available which smaller businesses can apply for even though they are not required to pay into the fund.

From May 2017, for those smaller employers who want to apply for training for apprentices, but who are not required to pay into the Apprenticeship Levy, the government will introduce a scheme whereby 10% contribution is required towards the cost of the training and the government will pay the remaining 90%.

There will also be additional support to organisations with fewer than 50 employees by the government paying 100% of training and assessment costs for their apprentices aged 16 to 18.

Immigration Skills Levy

From April 2017 employers who sponsor a migrant worker for a Tier 2 visa will be required to pay an ‘immigration skills charge’ of £1,000 per migrant, per year.  For smaller businesses and charities this is reduced to £364.  There will be exceptions such as for PhD roles.

The charge is being introduced through the Immigration Bill 2015/2016.

Abolition of Tax Savings in Many Salary Sacrifice Schemes

From 6th April 2017 tax benefits in relation to many salary sacrifice schemes will be taken away. 

These include:

• Company cars (unless ultra-low emission vehicles)
• Work-related training
• Workplace parking
• Private health schemes and health screening checks
• Mobile phone contracts
• Mobile phones and computers
• Gym membership
• Accommodation and school fees

Those schemes unaffected by changes include:

• Those relating to pension advice and contribution
• Childcare
• Cycling to work
• Ultra-low emission cars

If you would like further information on any of the above or have a query with an existing employment law issue affecting your business please contact Paul Stevens on 020 8290 7422 or email pstevens@judge-priestley.co.uk.