Is your business ready for key employment law changes this April?

With a number of key changes to employment law taking effect this April, Coodes’ Employment team breaks down what businesses need to do.

As these new legislations come into force, employers should be aware of changes that may affect their staff and businesses, either positively or negatively, and make amendments accordingly.

Changes that employers should be aware of, include:

National Living Wage increase

The national living wage for workers aged 25 and over has increased by 33p to £7.83 an hour. Other minimum living wages have also increased and the Low Pay Commission has already begun consultation for next year. Employers may want to use this as a chance to review all salaries to ensure the national living wage is being met.

Rise in statutory payments

Statutory maternity, adoption, paternity, shared parental pay and maternity allowance has risen to £145.18. Statutory sick pay has risen to £92.05 per week.

Mandatory gender pay gap reporting

Large private and voluntary sector employers are now required to publish annual information on their gender pay gaps, according to the Equality Act 2010. There are a number of figures these employers should provide, which are outlined by the Equal Pay Portal. Although businesses with more than 250 employees are required to publish annually, smaller businesses can choose to do so. Whether or not you are publishing your data, now would be a good time to review your salaries and ensure your organisation is paying staff fairly and not discriminating against any employees.

Tribunal compensation limits

The Employment Rights Order 2018 also came into force this month, bringing changes to payments awarded as a result of Employment Tribunals. The maximum amount of compensation that can be awarded for a normal unfair dismissal claim has risen to £83,682. A week’s pay is used as a starting point to calculate statutory redundancy payments and other awards for unfair dismissal. The maximum amount that can be used as a week’s pay is now set at £508.

Terminal payments

Termination payments are paid when a staff member leaves a company, as a result of redundancy, retirement, an agreed departure, dismissal or simply moving on. All payments in lieu of notice will now be subject to income tax and class 1 National Insurance contributions, including payments where there is no contractual PILON (Payment In Lieu Of Notice) power.

Taxation changes to payments for injuries to feelings

Payments for injuries to feelings can be agreed in settlement agreements. Previously there was an arguable distinction in the taxable status between injuries to feelings, which arose from pre-termination discriminatory acts, and discriminatory acts which formed part of the termination. New legislation means payments for injury to feelings will always be taxable, except when that distress amounts to a psychiatric injury or medical condition.

Foreign service relief

Foreign service relief, previously paid to UK resident employees who had to work abroad, has now been abolished.

Public sector equality duties

Part of the Equality Act 2010 came into force on 1 April, imposing duties on specified authorities to reduce inequalities. This legislation is designed to tackle discrimination which could put certain groups and individuals at a disadvantage. It is now important for all public sector organisations to be able to prove they have given consideration to how any of their policies of decisions might affect people who are protected under the Equality Act. While businesses do not have to comply with the duty, every employer should be familiar with the Equality Act 2010.

These key changes provide a perfect opportunity for businesses to review all employment contracts, ensuring you are meeting all the new standards.

If you need some friendly advice, call Steph Marsh on 01579 324017 or send an email. Alternatively, you can use the contact form on our website.