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Don’t be an April fool, find out about the top 5 changes to employment law this month...
03 April 2018

April has now sprung into action after the Easter bank holiday and we might (hopefully) be approaching better weather this summer. But before we longingly look towards the beach, we must work out what needs to be crossed off the employment law to-do list this month. Check out our round up of the top 5 employment law changes this April...

  1. April showers wash away distinction between contractual and non-contractual PILONs

    There used to be a tactical advantage in not having a payment in lieu of notice (PILON) clause in employment contracts as pay in lieu could fall within the £30,000 tax free exemption. 

    For dismissals that take place on or after 6 April 2018, however, this distinction has gone and so there is no difference in terms of tax between contractual or non-contractual PILONs.

    Employers will also need to separate out the “post-employment notice pay” from other termination payments as it will be taxable. This essentially ensures that payments relating to the notice period will be taxed.

    In light of this, we now advise more employers to put contractual PILON clauses in their contracts, especially if they have restrictive covenants to protect.
  2. Gender pay gap reports open the debate on promotion opportunities

    The deadline to publish Gender Pay Gap Reports was 4 April 2018.

    The gender pay gap calculations show the difference in pay between men and women from the lowest paid to the highest paid in a particular company. Equal pay, on the other hand, is a different thing. This compares what a man and a woman were paid for doing like work, work of equal value or work rated as equivalent.

    Producing the figures is now an ongoing obligation. The next snapshot date is 5 April 2018 to be published on 4 April 2019 so companies will still be busy crunching the numbers and working out strategies to enable more women to reach the best paid jobs.
  3. Blossoming compensation figures and high claims counts cause employer hay fever

    Claims received by the tribunal are up 90% compared to last year according to recent figures as a result of the abolition of tribunal fees in 2017.

    From 6 April 2018, a successful claimant in an unfair dismissal claim could be awarded up to £98,922 or a year’s pay, whichever is the lower. The maximum statutory redundancy payment would be £15,240 and a week’s pay is capped at £508. It is, therefore, more vital than ever that employers follow clear procedures when dismissing employees.
  4. Spring cleaning for wages, sick pay and family leave

    Since 1 April 2018, the National Living and Minimum Wage Rates have increased. For workers aged 25 or over must receive £7.83 per hour, it is £7.38 per hour for 21-24 year olds, £5.90 for 18-20 year olds and £4.20 for under 18s. Employers must update payroll systems immediately and keep records to demonstrate that they are paying the right amount.

    Statutory figures have also risen for sick pay (now £92.05 per week), and family related leave (maternity, adoption, paternity and shared parental) must now be paid at £145.18 per week for eligible employees.
  5. More planted into pension pots as auto-enrolment contributions increase

    From 6 April 2018, pension contributions increase from last year’s figures of 1% employer and 1% employee to become 2% from the employers and 3% from employees. This will increase again in 2019 and failure to follow this could lead to fines and companies being named and shamed.

So can we relax in May?

Unfortunately May doesn’t appear to offer any respite with the, not so small, matter of the GDPR coming into effect on 25 May 2018…well at least the days getting longer does have some use - more time to get GDPR compliant!

If you would like to discuss any of the above in more detail or how we may help you, please do not hesitate to contact the Employment team on 0118 952 7284.
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Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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