HR legislation

HR Bulletin – Employment Legislation Update February 2018

Welcome to the Febuary 2018 edition of our employment legislation update. These updates keep you informed about recent and proposed changes to employment legislation and regulations impacting on employment rights and obligations as well as important case decisions in the UK and the EC that impact on employers.

In the latest HR legislation update edition, the following issues are covered:

  • Current Childcare Vouchers Scheme closing to new entrants after March 2018
  • Minimum workplace pension contribution requirements are increasing from April 2018
  • National Living Wage and National Minimum Wage increases
  • Changes in taxable treatment of pay in lieu of notice in termination settlement agreements
  • General Data Protection Regulation
  • April 2019 pension contribution requirements

Childcare Vouchers

The current Childcare Voucher Scheme will be closed to new entrants after March.  Only existing participants and new members who have signed up to a registered scheme in time to receive vouchers in March 2018 will be able to continue to benefit from the scheme from April onwards.  Employees who are not eligible to join, or have not joined a childcare voucher scheme by the end of March, may subsequently be able to apply for the Government’s Tax-Free Childcare scheme, but will not be able to access a voucher-based scheme.

Pension Contributions (2018)

The minimum workplace pension contribution requirements are increasing from April 2018.

Total minimum contributions are currently set at 2%, with a minimum employer contribution of 1%.  From April, the total minimum contribution will increase to 5%. Of this, the minimum an employer must contribute will increase to 2%.

National Living Wage and National Minimum Wage

The National Living Wage, which applies to those aged 25 and above, and the National Minimum Wage for those under 25, will change from 1 April.

National Living Wage

Taxable treatment of pay in lieu of notice (PILON) in termination settlement agreements

The current position that allows for the first £30,000 of payments relating to PILON to be tax and NIC free, where there is no contractual provision for PILON, will end on 5 April. From 6 April 2018, all payments in lieu of notice (PILONs) will be both taxable and subject to Class 1 NICs.

Employers will be required to identify the amount of basic pay that the employee would have received if they had worked their notice period, even if the employee leaves the employment part way through their notice period. The amount will be treated as earnings and will not be subject to the £30,000 Income Tax exemption.

General Data Protection Regulation (GDPR)

The GDPR, which comes into effect on 25 May 2018, replaces and enhances current Data Protection laws.  It will introduce significant new obligations on all employers who process the personal data of data subjects who reside in the European Union, along with new rights for employees.

****If you are not sure how you will be affected by GDPR as an employer and / or would benefit from support in making sure that you are compliant, for example completing a data processing audit, updating your employment contract, employee handbook and policies or the preparation of a privacy statement, please do contact us 

Pension Contributions (2019)

From April 2019 the total minimum contributions made into an employee’s pension will increase to 8%.  From this, the employer’s minimum contribution will increase to 3%.

If you need any support implementing these employment legislation changes please do not hesitate to get in touch