Spring is always a key time of year for changes in employment law, and 2018 is no exception. Here’s my summary of the important updates you need to be aware of:
1. Increases to statutory redundancy payments
It can be easy to miss this one – the limit on a week’s pay increases on 6 April each year, and this year has risen from £489 to £508. For any redundancies that take effect on or after 6 April you will need to use the new figures.
The Government’s easy-to-use statutory redundancy calculator can be found at https://www.gov.uk/calculate-your-redundancy-pay.
2. Increases to SSP, SMP and other family-related leave payments
As with statutory redundancy, April is the month when these payments change. Since 6 April the SSP rate is now £92.05 per week, and for statutory maternity, paternity, adoption and shared parental pay, the rate has increased to £145.18 for pay weeks commencing on or after 1 April 2018.
3. Gender pay reporting
As you will be aware from our previous articles, any organisations caught by the gender pay reporting regulations were required to publish their reports by 4 April 2018. At the time of writing there are still many employers who haven’t submitted a report via the Government’s website as required. In addition, some of those who have published reports have included mathematically impossible information! If you haven’t done yours yet, or if yours is inaccurate, you are not alone – but in terms of getting it submitted and correct it is definitely better late than never!
4. Changes to taxation of termination payments
Again, hopefully this will not be a surprise to regular readers of our ebulletins, as we have covered this in our previous articles. In summary, an important change to the law on the taxation of termination payments took effect on 6 April 2018, meaning that all payments in lieu of notice must be taxed, regardless of whether there is a payment in lieu of notice clause in the employee’s contract.
However, there was a previous proposal to introduce of employer national insurance contributions on termination payments in excess of £30,000 which is now not taking effect until 6 April 2019.
5. Increases to National Minimum Wage rates
The National Minimum Wage and National Living Wage rates all increased from 1 April as follows:
|Workers under 18 (but above compulsory school age)||£4.20|
|Workers aged 18 to 20||£5.90|
|Workers aged 21 to 24||£7.38|
|Workers aged 25 and over||£7.83|
6. Increase to Tribunal awards
The basic award in unfair dismissal cases is calculated in the same way as the statutory redundancy payment, and therefore as stated above, the week’s pay limit is increased to £508 in the same way for dismissals where the effective date of termination is on or after 6 April.
The compensatory award limit also increases from 6 April and is now £83,682 (or 52 weeks’ gross pay, whichever is the lower).
The limit does not apply if the unfair dismissal was related to whistleblowing or carrying out health and safety activities.
7. Increase to auto-enrolment contributions
For most employers, an increase applies this month so that you will need to contribute more to your employees’ pension. The rates are as follows:
|Date||Employer contribution||Employee contribution||Total contribution|
|Until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
The staff contribution rate may vary depending on the type of tax relief applied by the scheme. If in doubt please speak to your pension adviser.
8. Preparation for GDPR
And last but by no means least, employers need to be getting ready for the General Data Protection Regulation (GDPR) which takes effect on 25 May 2018. The new law is attracting a lot of attention, so I’m sure you won’t have managed to miss this one! You’ll be pleased to know you won’t find any scaremongering from us, but it is definitely something you need to be aware of – our previous article on the subject can be found here. If you need any sensible, pragmatic assistance with the employment aspects of GDPR, please do get in touch.
f you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.