Pay rate increases

The National Minimum Wage (NMW) rate for workers is set to rise on 1 April 2017. The increases are as follows:

  • £7.05 per hour (currently £6.95) - aged 21 and over 
  • £5.60 per hour (currently £5.55) - aged 18-20 
  • £4.05 per hour (currently £4.00) - aged 16-17
  • £3.50 per hour (currently £3.40) - apprentices under 19, or over 19 and in the first year of the apprenticeship
  • The National Living Wage, introduced in April 2016 for over 25's, increases from £7.20 to £7.50 per hour.

From 2 April 2017 Statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay rates will increase from £139.58 per week to £140.98 per week

Gender Pay Regulations

The key legislative change larger employers should be preparing for is the introduction of the Equality Act 2010 (Gender Pay Gap Information) Regulations, which are expected to come into force on 6 April. These require private and third sector employers with 250 or more employees to report annually on their mean and median gender and bonus pay gap, on the proportion of men and women who receive bonuses, and on the proportion of men and women in each pay band quartile. The first reports, based on April 2017 pay data, are due to be published in 2018. We can also advise those employers under the threshold on the benefits of reporting.

Apprenticeship Levy

The implementation date for the Apprenticeship Levy is 6 April 2017. This will be imposed on all large employers across all industry sectors, both public and private, to raise money to meet the cost of apprenticeship training. Large employers will have to commit to spend 0.5% of their wage bill, based on total employee earnings excluding payments such as benefits in kind, which will be collected via PAYE. Employers will receive an allowance of £15,000 to offset against the payment of the levy, which means that only employers with pay bills of more than £3 million will be eligible.

Changes to migrant workers 

There will be changes to rules for employing foreign workers. Employers sponsoring foreign workers with a Tier 2 visa will be required to pay an immigration skills charge of £1,000 per worker (£364 for small employers and charities) beginning in April 2017. The immigration skills charge will be in addition to current fees for visa applications. In April 2017, the minimum salary threshold for “experienced workers” applying for a tier 2 visa will also increase to £30,000. New entrants to the job market and some health and education staff will be exempted from the salary threshold until 2019.

Customer facing roles require fluency in English (or Welsh)

The Code of Practice requiring public sector employees in customer facing roles, to speak fluent English (or Welsh, in Wales), as required under the Immigration Act 2016, came into force on 22 December 2016. The Code outlines how a public authority can set an appropriate standard of spoken English and provides options for setting up a complaints procedure. Therefore, for any clients to whom this Code is likely to apply, we recommend reviewing your policies so that any language requirements are properly documented.

Appropriate dress code policy

There were two cases in 2016 relating to the wearing of religious dress (Achbita and another v G4S Secure Solutions NV and Bougnaoui and another v Micropol Univers) in the workplace, which are pending a decision from the European Court of Justice. Although both cases are specifically concerned with religious dress, the decision may well impact on how UK Employment Tribunals deal with cases where employees believe their employer’s dress code has breached their rights. This is a grey area as dress policies are not directly covered by legislation – although all employers are strongly advised to have a dress policy in place 

About the author

Ian Besant Partner

Ian is head of the employment & HR team. He advises on the full range of employment law issues as well as conducting his own advocacy before the Employment Tribunal and has particular expertise in Employment Appeal Tribunal cases.