A quick reminder of the key employment law changes coming into effect next month.
National Minimum Wage
The rate of the compulsory National Living Wage for adults aged 25 and over will increase from £7.50 to £7.83 per hour on 1 April 2018.
The revised National Minimum Wage rates that will also take effect on 1 April 2018 are:
- Adult rate (workers aged 21-24) to increase from £7.05 to £7.38 per hour
- Workers aged 18-20 to increase from £5.60 to £5.90
- Workers aged 16-17 to increase from £4.05 to £4.20
- Apprentices to increase from £3.50 to £3.70
On 1 April 2018, SMP, SAP, SPP and SSPP will increase from £140.98 to £145.18.
Tribunal compensation limits
New limits on certain Employment Tribunal awards will come into force on 6 April 2018. The two key changes are:
- The limit on the compensatory award for “ordinary” unfair dismissal will increase from £80,541 to £83,682
- The maximum amount of a week’s pay for the purposes of calculating statutory redundancy payments and the unfair dismissal basic award increases from £489 to £508
Note that the cap on the compensatory award for “ordinary” unfair dismissal is the lower of the statutory limit set out above and 52 weeks’ pay of the individual concerned.
Gender pay gap reporting
Private sector employers in Great Britain with 250 or more employees must publish their first gender pay gap reports on or before 4 April 2018.
From 6 April 2018, the statutory minimum automatic enrolment contribution rates in defined contribution schemes will increase to 5% of qualifying earnings. This includes a minimum employer contribution of 2%.
The balance is made up of employee contributions and tax relief.
Taxation of termination payments
From 6 April 2018, all payments in lieu of notice will be treated as earnings and, therefore, subject to tax and employee’s and employer’s NICs. This is irrespective of whether there is a PILON clause in the contract of employment. The new rules will apply to payments received on or after 6 April 2018 in circumstances where the employment is also ended on or after 6 April 2018.