Changes to employment law affecting gender pay reporting, salary sacrifices and immigration charges all come into force this month. The IAS outlines what these new regulations are and what you will need to do next
Ensuring your company complies with employment law is essential if you want to avoid serious penalties or legal action. This month sees three major changes in law come into place, at least one of which is likely to affect your business in some way. Read on for the essential information and what you should do next if the law affects you…
Gender pay gap reporting
On 5 April, businesses with 250 or more employees will be required to publish six calculations of their average gender pay gap, including the average gender pay gap; average bonus gender pay; proportion of males and females receiving a bonus payment; and proportion of males and females in four separate groups arranged from the lowest to highest paid.
You will have until 5 April 2018 to publish the results on both your company website and a government one, with an accompanying statement confirming the results from an appropriate person such as a chief executive. Gender pay gap reporting is not to be confused with an equal pay audit.
Change in salary sacrifice (benefits in kind) schemes
As of 6 April, the government intends to limit the income tax and employer national insurance contribution advantages of salary sacrifice schemes by valuing the benefit in kind (BiK), such as a mobile or white goods, based on the salary sacrificed or the current taxable value of the BiK, whichever is the higher. If you are using salary sacrifice schemes with your employees you will need to familiarise yourself with the new rules.
Almost one in four employers will need to make adjustments to their benefits package as a result of these changes. You should calculate the financial impact the changes may have on your business including one-off costs for IT changes, as well as taking the time to familiarise yourself with the new rules and processes. In April 2018, HMRC will introduce a new version of the P11D form, which will ask for details of any salary sacrificed to allow reporting of the extra information.
Immigration skills charge
To help reduce Britain’s reliance on migrant workers and encourage employers to recruit and train British workers, the government is introducing an immigration skills charge, set to come into effect on 6 April. The charge is set at £1,000 per employee per year and will be levied on Tier 2 employers (those recruiting migrants in skilled areas), but there are exceptions: in the case of graduate trainees, PhD-level roles and graduates switching immigration status there is no fee, and a reduced fee of £394 for small and charitable sponsors. From April onwards the minimum salary which must be paid to experienced workers within the Tier 2 immigration category will rise to £30,000 per annum, while the minimum salary for Tier 2 intra-company transfer applicants is set at £41,500.
When the legislation comes into effect it will be more expensive to sponsor migrant employees, meaning there is arguably less incentive to do so. If you are a Tier 2 employer you should factor the new costs into your 2017/18 budget and ensure you comply with the levy when beginning or renewing a migrant contract after the starting date.
How the IAS could help you
• The IAS provides IoD members with free business intelligence and advice to help them run their companies more efficiently and successfully.
• The Business Information Service is able to investigate questions on behalf of members and supply them with valuable information, ranging from market forecasts and industry trends to trading abroad and employee salaries.
• The Directors’ Advisory Service provides confidential, independent advice from specialists on issues ranging from raising finance to board and shareholders’ disputes.
• Members can receive prompt and confidential business, personal tax and legal advice through the IoD’s telephone helplines.
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