Here are seven employment law issues you need to consider as you embark on the New Year…

1) Brexit

Article 50 is set to be triggered by the end of March 2017, which will begin the two year negotiating period to leave the EU. Although no legal changes will take place and Britain won’t leave the European Union in 2017, the continued uncertainty around Brexit has the potential to affect employment and recruitment – especially where employers rely on large numbers of foreign workers.

2) Status and the gig economy

Arguably, the most important employment law decision of 2016 was that Uber drivers are workers rather than self-employed. This case applied longstanding status principles to Uber’s business model – the likes of which are contributing to the growth of the ‘gig economy’. Alongside numerous tribunal claims, the government has launched a review of modern employment to consider how these new models and ways of working are affecting employment rights. We expect to see more rights and status questions being answered in 2017.

3) Paying legal minimums

The government will continue to focus on ensuring that employers are correctly paying the National Minimum Wage and National Living Wage in 2017. The Chancellor announced a £4.3 million yearly increase in the amount available for enforcement of the minimum wage. This money will be used to set up specific teams from HM Revenue and Customs who will target employers most likely at risk of not paying legal rates.

4) Gender pay gap reporting

The law requiring employers to publish a gender pay gap report will take effect from 6 April 2017. Employers with 250 or more employees will have to:

  • Calculate and publish the mean and median hourly pay gap and annual bonus gap between men and women
  • Calculate the number of men and women who fall into four pay quartiles
  • Publish the report on the employer’s website within a year of calculation date for three years, and submit to the Secretary of State

5) Apprenticeship levy

April 2017 will also see the commencement of the apprenticeship levy: the government’s initiative to ensure the creation of 3 million apprenticeships by 2020. Employers with an annual pay bill of £3 million and over will:

  • Have to pay 0.5% of their pay amount into a digital apprenticeship account
  • Receive a £15,000 yearly allowance from the government to offset against this amount, which will be applied monthly
  • Have to use the funds within 24 months or they will expire.

6) Benefits of salary sacrifice removed

Salary sacrifice is often seen as a useful way of providing employee benefits whilst receiving a financial benefit – the employee doesn’t pay income tax, and National Insurance contributions aren’t paid on the amount sacrificed. The tax advantage will be removed for all salary sacrifice schemes from April 2017 except for the provision of pensions, vouchers, cycle to work schemes, and ultra-low emission vehicles.

7) Caste discrimination to be introduced?

Caste is a hereditary way of classing an individual’s status based on factors such as their wealth and occupation. It’s not explicitly included as a protected characteristic in the Equality Act 2010, however, a tribunal case found that ethnic origins, included in the protected characteristic of race, could include questions of descent and therefore caste.  A consultation was announced in September 2016, which means that 2017 may be the year caste is finally written into the Equality Act.