2018 is set to be a hugely important year in terms of employment law, with high profile cases and significant new legislation likely to have a major impact on employers.
Howes Percival Partner and employment law expert, Paula Bailey commented, “2018 is potentially going to be a landmark year for employment law. The ‘gig economy’ and the status of workers will remain a key topic with high profile cases in the courts and the Government expected to respond to the Taylor Review of Modern Working Practices. Meanwhile, employers need to get to grips with two massive legislative changes in the shape of the General Data Protection Regulation (GDPR) and Gender Pay Gap Reporting.
“April is the deadline for publication of the first gender pay gap reports and whilst some companies have already published their data revealing the differences in pay between men and women in their workforce, many employers have yet to do so. As we’ve seen already, companies could potentially face media scrutiny if large pay gaps are exposed.
Paula Bailey continued, “New data protection legislation, which comes into force in May 2018, will provide increased rights and protections in respect of an individual’s personal data. The magnitude of the changes coupled with stiff penalties for non-compliance means that it’s vital that employers ensure they have systems in place to make sure they are compliant.”
“We have been working with organisations to help prepare them for both GDPR and Gender Pay Gap and we would encourage all employers to seek legal help if they have any concerns about the changes coming this year.”
Gender Pay Gap Reporting
Employers with 250 or more employees will have to produce and publish their “gender pay gap reports” by 4 April (30 March for public sector employers) if they have not done so already. Employers are required to publish information on the percentage differences between the mean and median hourly rate of pay between men and women across their workforce, the proportions of men and women who receive bonuses and the relative proportions of men and women in each quartile pay band, based on a “snapshot date” of 5 April 2017 (31 March for public sector). Aside from the key figures, employers should consider whether to publish any narrative to explain any gap or to show what action will be taken to address it.
The General Data Protection Regulation
The General Data Protection Regulation (GDPR) comes into force on 25 May. With fines of up to €20 million or 4% of global turnover, it is critical that employers are compliant especially as the GDPR introduces a duty of “accountability”. To prepare, employers should establish a compliance timeline, carry out a data audit, determine the basis upon which data will be processed, update key policies and processes and make sure everything they do is documented.
Changes to statutory rates of pay
In April, the National Living Wage for employees aged 25 and over will rise from £7.50 to £7.83, together with other increases to the National Minimum Wage rates. Statutory Maternity, Paternity, Adoption and Shared Parental Pay rates will also increase to £145.18 per week. Statutory Sick Pay increases to £92.05.
Taxation of Termination Payments
From 6 April all payments in lieu of notice will be subject to normal deductions for tax and National Insurance. This means employers will no longer have the option of paying tax free damages in lieu of notice where there is no contractual right to pay in lieu.
