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Key Employment Law Amendments April 2017

The key employment law amendments that will come into force in April 2017 are:

From 1st April the national minimum wage  (NMW) and national living wage (NLW) levels are:

  • the NLW for workers aged 25 or over will increase to £7.50 per hour
  • the NMW standard rate for workers aged 21 to 24 will increase to £7.05 per hour
  • the NMW development rate for workers aged 18 to 20 will increase to £5.60 per hour
  • the NMW young workers rate for those aged 16 and 17 will increase to £4.05 per hour
  • the NMW apprenticeship rate will increase to £3.50 per hour

From the 6th April, the following changes specific to affect SME's are:

Salary sacrifice schemes that enjoy PAYE and National Insurance advantages will be limited to certain employee benefits-in-kind only.  These include:-

  • cycle-to-work schemes
  • workplace nurseries
  • enhanced employer pension contributions to registered pensions schemes
  • ultra low-emission vehicles

Arrangements already in place prior to 6 April 2017 are protected until April 2018 and other arrangements relating to accommodation, cars and school fees will be protected until April 2021.  

You are advised to check this carefully with your payroll provider or accountant.

Compensation limits increases as follows:-

  • pay used to calculate the cap on statutory redundancy payments, an unfair dismissal basic or additional award or and payments to employees in the event of company insolvency, increase from £479 to £489 per week
  • the unfair dismissal compensatory award increases from £78,962 to £80,541 (or one year's salary)
  • the statutory guarantee payment paid during periods of lay-off will increase from £26 to £27 per day

Family-related pay changes for pay weeks on or after 2nd April 2017 affecting:-

  • statutory maternity pay (SMP)
  • statutory adoption pay (SAP)
  • statutory paternity pay (SPP)
  • statutory shared parental pay (ShPP)

increase from £139.58 to £140.98 per week.

The weekly rate of statutory sick pay (SSP) will increase from £88.45 to £89.35 from 6th April 2017.

Pensions:- the automatic enrolment earnings trigger remains at £10,000 for tax year 2017/18.

A pensions advice allowance is being introduced which will allow pension scheme members and their beneficiaries to take a tax-free amount of £500 from their scheme to offset against the cost of obtaining financial advice relating to their retirement. The allowance can be taken once in any tax year and up to a maximum of three times in total.

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Published on: 4th April 2017
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