There have been several key changes to employment law this April, including national minimum wage increases, changes to statutory payments and compensation limits, and new rules governing the tax and NICs treatment of termination payments.
National Minimum Wage
The National Minimum Wage (Amendment) Regulations 2018 came into force on 1 April 2018. The new rates are as follows:
- National Living Wage (age 25+) £7.83 (previously £7.50)
- Standard adult rate (age 21-24) £7.83 (previously £7.05)
- Development rate (age 18-201) £5.90 (previously £5.60)
- Young workers rate (age 16-17) £4.20 (previously £4.05)
- Apprenticeship rate £3.70 (previously £3.50)
The following statutory payments have increased as follows:
- Maternity, adoption, paternity and shared parental pay £145.18 (previously £140.98)
- Maternity allowance £145.18 (previously £140.98)
- Statutory sick pay £92.05 (previously £89.35)
- Statutory redundancy pay £15,240 (previously £14,670)
Mandatory gender pay gap reporting
In a bid to tackle the gender pay gap, and to promote pay transparency, large private and voluntary sector employers (those with 250 or more employees) are required to publish annual information on their gender pay gap under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. First reports were due on 4 April 2018 and the process will need to be repeated annually, with figures retained on-line for three years.
Tribunal compensation limits
The Employment Rights (Increase of Limits) Order 2018 came into force on 6 April 2018. The maximum compensatory award for unfair dismissal will rise from £80,541 to £83,682. The maximum amount of a week's pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, also rises from £489 to £508.
On 6 April 2018, all payments in lieu of notice, including payments where there is no contractual PILON clause, will be subject to income tax and class 1 NICs. Essentially, the part of the termination payment which is equivalent to the employees basic salary, will be subject to tax if (and to the extent that) notice is not worked.
General Data Protection Regulations (GDPR)
GDPR comes into force on 25 May 2018 and will change how businesses and public sector organisations can handle the information of their employees, clients and customers. Organisations will need to comply with new requirements, update their current data protection policies and procedures, complete extensive data protection audits and may need to appoint a designated data protection officer to oversee the business’ GDPR compliance. For more information please visit our GDPR resources hub page.
Data protection charges
The draft Data Protection (Charges and Information) Regulations 2018 (the Regulations) have now been published and will replace the current Data Protection (Notification and Notification Fees) Regulations 2000. The final version of the Regulations will come into force on 25 May 2018 in line with the GDPR. The draft Regulations set out the following:
- When data controllers will be required to provide information to the Information Commissioner's Office (ICO) and pay a charge associated with the processing of personal data.
- An annual charge to the ICO is required unless all processing undertaken by the controller is exempt. The ICO has also published a guide to the draft Regulations on how controllers can determine whether they are exempt from this requirement. The guide also outlines the ICO's intention to publish an online exemption assessment tool by 25 May 2018 to assist).
- Special provisions must be made where there is more than one data controller in respect of personal data. For example, in the case of a governing body and head teacher of a school.
- Different fee levels, as follows:
- Tier 1 (£40) applies to micro organisations with a turnover of up to £632,000 or up to 10 members of staff;
- Tier 2 (£60) applies to small and medium organisations with a turnover of up to £36,000,000 or up to 250 members of staff; and
- Tier 3 (£2,900) applies to organisations who exceed the turnover and numbers of staff in Tier 2.