5 employment law changes happening this April
We explain the biggest law changes happening this month and why you shouldn’t ignore them.
There are a number of new employment laws for you to get your head around this April. You’ll recognise the usual minimum wage increases, but you might not be aware of changes to pension contributions or a new data protection law that’s coming in.
To help you make sense of these new laws, we explain what’s changing and how they’ll affect you.
- Pay staff new minimum wages
The new minimum wages kick in this April. That means your staff could be entitled to more money per hour.
On 1st April, the National Living Wage—the rate that applies to staff aged 25 and over—went up from £7.50 to £7.83 an hour. But that’s not all.
Workers on the National Minimum Wage (NMW) also get more money per hour on 1st April.
Here are the new NMW rates:
- 21 to 24-year-olds: from £7.05 to £7.38 per hour
- 18 to 20-year-olds: from £5.60 to £5.90 per hour
- Under 18s: from £4.05 to £4.20 per hour
- Apprentices: from £3.50 to £3.70 per hour
If you don’t pay your workers the right minimum wage, you could face a hefty fine.
- Make higher pension contributions
The government changed the law around pensions on 6th April.
You now need to contribute 2% to your employee’s auto-enrolment pension as a minimum contribution. This is up from 1%.
Your employees must pay a minimum of 3% to bring the total contribution to 5%. If you fail to pay the right amount towards your staff’s pensions, you risk facing a large fine.
- Know the financial cost of losing a tribunal
On 6th April, the maximum award for unfair dismissal went up to £98,922. This is an enormous fine for you to pay out.
Especially as it’s now easier for employees to take you to a tribunal after the Supreme Court banned fees last July. In fact, unfair dismissal claims went up by 65% in the last three months of 2017.
- Review how you make termination payments
In the past, whether you’d pay tax on a payment in lieu of notice (PILON) would depend on the terms of your employee’s contract.
But this is no longer the case. HMRC now treat all PILON as earnings—so you have to pay tax and National Insurance contributions no matter what’s in your employees’ contracts.
- Prepare for GDPR before it’s too late
Remember the date: 25th May 2018. This is when the General Data Protection Regulation (GDPR) comes in.
GDPR is a new data protection law that will change everything about how you handle personal data.
And, although it’s not happening until May, it’s important to start preparing as soon as possible. Especially as you could face a maximum penalty of £17million if you’re not compliant.
But don’t worry, we can help.
To understand what this law change means for you and to help you prepare, head to our GDPR info-centre.