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Legal lowdown: What 2017 holds

HR needs to get to grips with gender pay gap reporting, the apprenticeship levy, and childcare-related changes

The autumn tends to be very busy for HR professionals as they try to get to grips with a host of employment law changes. But which upcoming legislative changes will affect HR professionals in 2017 and beyond? We examine the key ones HR will need to be prepared for.

Gender pay gap reporting

Perhaps the biggest change to prepare for is gender pay gap reporting. After a long wait the final version of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 was published in December. They set out how employers should calculate and report on the gender pay gap within their organisation from April 2017.

To recap, the key obligations are:

  • The reporting regime applies to all private sector employers with 250 or more employees.
  • Employers must publish the mean and median hourly pay gap between men and women, based on the pay period containing a specific date in April each year (the 'snapshot date'). 'Pay' for this purpose includes any bonuses paid in that period.
  • Employers must also report the annual bonus gap between men and women, again using a specific date in April, together with the proportion of male and female employees who received a bonus that year. 'Bonus' is defined widely to include commission and securities.
  • There is an additional obligation to publish the numbers of men and women in each of four quartile pay bands.
  • The first calculation date is April 2017. The data must be publicly published on the employer’s website by April 2018 and remain there for three years.

The final regulations contain a number of changes from the original draft, many of which seem to have been prompted by responses to the consultation process. The regulations will now be placed before parliament and may be subject to further tweaks before being finalised. Once approved by parliament the government will also publish supporting non-statutory guidance for employers to flesh out what will be required.

Apprenticeship levy

All large employers (with an annual pay bill in excess of £3 million) will be required to pay an apprenticeship levy, set at 0.5% of the employer’s pay bill. The money gathered via this scheme will be distributed to fund the cost of apprenticeship training and assessment. The legislation is expected to come into force on 6 April 2017.

Tax-free childcare scheme

The tax-free childcare vouchers scheme will enable families to claim a 20% rebate on their childcare costs, up to a limit of £2,000 per child, from the government. Research has shown nearly a quarter of employed mothers would increase their working hours if they could arrange good-quality childcare that was convenient, reliable and affordable. The government has said that the scheme will be introduced in early 2017.

Shared (grand)parental leave

Grandparents have no right under UK employment law to paid or unpaid leave to spend time with their grandchildren in their capacity as grandparents.

The government has said that it intends to extend the right to take shared parental leave and pay to grandparents by 2018. A consultation on the extension was expected in May 2016 but has not yet been published. It is thought that this will only affect working grandparents.

Taxation of termination payments

The government has released draft legislation on proposed changes to the taxation of termination payments. As drafted, the legislation retains the exemption from income tax for the first £30,000 of a non-contractual termination payment but requires employers' NICs to be paid on all payments above £30,000. It will also result in all payments in lieu of notice being taxable irrespective of whether they are contractual or not. The new system is proposed to take effect in 2018.

Caroline Acton is a solicitor at ESP Law, which provides HR magazine's HR Legal Service