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Employment Law changes for the Housing sector - what you should know

April 2017 will see a number of changes in employment law coming into force, many of which will directly impact employers across the housing sector. We consider these below.

Gender pay gap reporting

Employers with 250 or more employees will be required to report their gender pay gap data. The report must include information on:

Voluntary sector employers must take a “snapshot” of the relevant pay data on 5 April in each year, and will have 12 months to report on that data by publishing it on their own website and uploading it to a Government website. The first reports must be published by 5 April 2018.

Immigration skills charge

The draft Immigration Skills Charge Regulations are expected to come into force on 6 April. Employers who sponsor skilled workers under Tier 2 of the points-based immigration system will be required to pay a levy of £1,000 per certificate of sponsorship they issue per year (£364 for small employers and charities), with some exemptions.

Apprenticeships

Employers with an annual pay bill of £3 million or more will be required to pay a monthly levy through PAYE at a rate equivalent of 0.5 % of their payroll costs. Payment of the levy will allow employers to access funding through a new digital service, which is expected to be available from May 2017.

National living and minimum wage increases

The national living wage for workers aged 25 and over will increase on 1 April from £7.20 to £7.50. The rates will also increase to £7.05 for workers aged 21-24, and to £5.60 for those aged 18-20.

Increase in statutory payments

Statutory maternity, paternity, adoption and shared parental pay will increase to £140.98 for pay weeks commencing on or after 2 April 2017. Statutory sick pay will increase to £89.35 per week from 6 April.

The statutory cap on a week’s pay for the purposes of calculating statutory redundancy payments and other awards including the basic award for unfair dismissal will be increased to £489.

Tax advantages for salary sacrifice arrangements

The tax advantages of salary sacrifice arrangements, whereby the employee agrees to give up some of his or her contractual entitlement to cash earnings in return for non-cash benefits, are to be reduced.

Under the new arrangements, the taxable value of benefits in kind provided via salary sacrifice arrangements which come into effect from 6 April will be fixed at the higher of the amount of cash foregone or the amount calculated under the existing rules. This will remove the income tax and employer national insurance advantages of salary sacrifice arrangements. There are exceptions, however, for salary sacrifice schemes relating to pensions, childcare, cycle to work schemes and schemes relating to ultra-low emission cars. Schemes in respect of these benefits in kind will be unaffected.

The change will not affect those in existing salary sacrifice arrangements until there is an end, modification or renewal of the current contract, or until 6 April 2018, whichever is the earlier. For schemes which relate to cars, accommodation or school fees, the long stop date is extended until 6 April 2021.

For further information on how these changes will affect your organisation, please contact Elaina Moss and Raj Chahal.

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