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April 2017 - Some Key Employment Law Changes

on Thursday, 13 April 2017.

The following changes to employment law have come into effect this month:

Apprenticeship Levy

The new Regulations requiring companies with a pay bill of more than £3 million to pay an apprenticeship levy were brought into force on 6 April 2017. The levy will be charged at a rate of 0.5% of the company's annual pay bill, payable monthly via PAYE. However, employers will receive an annual allowance of £15,000 to offset against their levy liability, to be spent on government approved apprenticeship training programmes.

Employers in England who pay the levy will be able to access funding through a digital service (DAS). The new system of funding is expected to operate from 1 May 2017. Employers that do not qualify to pay the levy will also be able to access funding for apprenticeships.

Statutory Redundancy Pay Rates Increase for 2017-2018

  • The cap on a week's pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) has increased from £479 to £489 per week from 6 April 2017.
  • As statutory redundancy pay is subject to a maximum of 20 years' service, the maximum statutory redundancy payment an employee can now receive is £14,670.
  • The maximum compensatory award for unfair dismissal which a tribunal can order has increased from £78,962 to £80,541.

These revised limits apply to all employees whose effective date of termination is on or after 6 April 2017. Where the effective date of termination fell prior to 6 April 2017, the previous limits will apply.

National Minimum Wage Increase

From 1 April 2017, the national minimum wage has increased from £7.20 to £7.50 for workers aged 25 and over. The rates within the other age bands have also increased as follows:

  • for workers aged 21 years or over (but not yet aged 25 years) - increase from £6.95 to £7.05 an hour
  • for workers aged 18 or over (but not yet aged 21 years) - increase from £5.55 to £5.60 an hour
  • for workers aged under 18 years (but above compulsory school age) - increase from £4.00 to £4.05 an hour
  • for apprentices - increase from £3.40 to £3.50 an hour

Statutory Family-Related Pay And Sick Pay Rates Increase

The weekly rate of statutory maternity, paternity, adoption and shared parental pay has increased to £140.98 for pay weeks commencing on or after 2 April 2017. In addition, the weekly rate of statutory sick pay has increased to £89.35 from 6 April 2017.

For more information, please contact Eleanor Boyd in our Employment Law team on 020 7665 0940.

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