Raft of employment law changes have now come into effect

Several changes to employment law came into effect on 1 April.

Apprenticeship Levy

Employers with payrolls of £3m and above now have to pay a levy of 0.5% of their pay bill to help fund 3 million additional apprenticeships over the next five years.

The aim is to increase job opportunities for people aged between 16 and 24.

The annual pay bill is defined as comprising of total payments to employees that are subject to Class 1 secondary National Insurance Contributions. Employers will receive £15,000 to offset against the levy.

National Minimum Wage and National Living Wage

The National Living Wage for employees aged 25 and over has increased from £7.20 per hour to £7.50.

The National Minimum Wage Rates are:

Apprentices are entitled to the apprentice rate if they’re aged under 19, or aged 19 or over and in the first year of their apprenticeship.

Apprentices are entitled to the minimum wage for their age if they are aged 19 or over and have completed the first year of their apprenticeship.

Gender Pay Gap Reporting

Companies with more than 250 employees will have to publish the mean and median gender pay gaps within their organisation.

The first reports covering the current financial year will be due in April next year.

There is no duty to explain any gender pay gap that is uncovered, nor any obligation to correct it as long as the employer is complying with the Equality Act. At the moment there is no penalty for failing to publish a report although that may change in the future.

In the meantime, it’s thought that the threat of reputational damage in the media that would come from failure to publish will put pressure on employers to comply and correct any anomalies. It’s also thought that employers may fear that if they fail to publish, or if a large gender gap is revealed, it will deter women candidates from joining their organisations.

Modern Slavery Act

This has now come into force and affects enterprises with a turnover of £36m or more. It could also have an impact on their suppliers, even if they are relatively small businesses.

These large organisations now have to provide statements outlining the measures they have taken to ensure there is no slavery or human trafficking in their business or supply chain. The aim is to eradicate the exploitation of vulnerable people both in this country and abroad.

SMEs may also be required to provide statements if they trade with larger businesses. This is to ensure that the larger enterprises are complying with their obligations and not simply moving the issue along to suppliers or subsidiary companies.

Please contact Robert Bedford if you would like more information about the issues raised in this article or any aspect of employment law.