Gender Pay Gap Reporting
On or before 4th April 2018, private and voluntary sector employers in England, Wales and Scotland who have 250 or more employees are required to publish information about the difference in pay between their male and female employees. The information should be based on a “snapshot” of pay rates as at 5 April 2017.
There are similar reporting requirements for certain public sector employers which must also produce a gender pay gap report must be published by 30th March 2018. Many employers have still to report, so this is a priority for them now in the first months of 2018.
Increase in the National Minimum Wage (NMW)
As of the 1st April 2018, the NMW will increase in line with the Conservatives’ aim to have a £9-an-hour national minimum wage by 2020. Workers of 25 years and over will see the national living wage increase from £7.50 to £7.83; those between the ages of 21 and 24 will see NMW rise from £7.05 to £7.38, there will be rise from £5.60 to £5.90 for 18-20 year olds: from £4.05 to £4.20 for NMW for 16-17 year olds and from £3.50 to £3.70 for NMW apprentices aged under 19 or in the first year of their apprenticeship.
Failure to comply comes not only with financial risk but also huge reputational damage. In December last year the Government named and shamed 260 employers who had failed to pay both the NMW and National Living Wage and issued fines totalling £1.3 million. Amongst those were high street retailers Primark and Sports Direct.
Taxation of Termination Payments
The taxation of termination payments will change with effect from 6 April. From that date all payments in lieu of notice (PILON) whether contractual or non-contractual will be taxable as earnings and subject to employer and employee National Insurance Contributions (NICs). The change introduces the concept of post-termination notice pay, so that even if the payment made to the employee is not stated to be a PILON, any part of the termination payment which relates to the basic pay that the employee would have been entitled to receive had they worked their notice will be taxable as earnings. Any amount in excess of the post-termination notice pay which is paid to the employee may benefit from the application of the £30,000 exemption.
In addition, with effect from 6 April 2019, all payments that benefit from the application of the £30,000 exemption and which are in excess of that amount will be subject to Class 1A NICs.
Equal Rights for Paternity Pay?
The outcome of the appeals to the EAT in the case of Mr Ali Madasar v Capita Customer Management Ltd and in the Hextall v Chief Constable of Leicester Police are expected. For example, Capita Customer Management’s relevant maternity policy granted women the right to 14 weeks’ enhanced pay whilst on maternity leave, however, its Parental Leave policy allowed partners two weeks’ full pay for paternity leave only with only statutory pay for subsequent shared parental leave taken (as opposed to enhanced maternity pay available to the mothers of children on maternity leave).
Mr Ali raised a claim in the employment tribunal for sex discrimination. The employment tribunal found in favour of Mr Ali. Capita appealed.
The outcome of these appeals should provide binding authority to employment tribunals on the much debated question whether businesses should to pay fathers on shared parental leave the same as their female employees taking maternity leave.
Equal Pay; and Harassment
#Metoo and sexual harassment claims at work were a talking point at the end of last year. It seems that these issues and equality are set to continue to be an issue in 2018. Inequality in pay for equal work is back in the headlines this week.
General Data Protection Regulation (GDPR)
Possibly the biggest change to touch on employment law will be the introduction of the GDPR on the 25 May 2018.
In preparation, employers should be carrying out audits of what their employment contracts say; and of the personal data that they collect and process to ensure GDPR compliance. The most significant change surrounds the issue of consent, and so employment contracts and policies should be reviewed, privacy notices should be updated (or drafted) and employers may need to appoint a Data Protection Officer to be compliant.
With the potential of a fine for up to 20 million euros or 4% of worldwide turnover, whichever is greater, it is essential for employer’s to be prepared for this change and take action now. For more information, visit our GDPR hub.
Contact our Specialist Employment Lawyers
MacRoberts’ Employment Group is the longest established specialist team in Scotland, and we are known for using our practical and effective approach to find solutions for our clients. We’d happy to help with any questions you may have and in the meantime wish all out readers the very best for 2018.