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From time to time we will post news articles and announcements relating to the firm and to various legal issues that may be of interest to you.

Employment Law Legislation Update March 2017 – Key Changes To Be Aware Of

As is the case each year, April triggers employment legislation changes coming into effect and it is important that both employers and employees alike are aware how these changes might affect them. The main changes to note are summarised below.

National Minimum Wage Increases

The new National Minimum Wage rates come into effect, which are effective from 1st April 2017.

  • Apprenticeship rate:                                                                £3.50 per hour;
  • Rate for workers aged 16 and 17:                                          £4.05 per hour;
  • Rate for workers aged 18 to 20:                                             £5.60 per hour;
  • The standard adult rate for workers aged 21 to 24:               £7.05 per hour;
  • National Living Wage rate for workers over 25:                     £7.50 per hour;

Trade Union Industrial Action Changes

Major provisions of the Trade Union Act 2016 came into force on 1st March 2017. These provisions bring in new requirements that must be met before lawful industrial action can take place. These changes are:

  • a requirement that there is at least a 50% turnout of workers eligible to vote in any industrial action ballot;
  • In the public services sector, at least 40% of those entitled to vote in the ballot must vote in support of industrial action for any vote to be carried;
  • new information requirements which a trade union must set out within the voting paper including: a summary of the matters in dispute, the type of industrial action proposed (where action is not a strike) and the period or periods within which the industrial action is expected to take place;
  • employers are now entitled to receive two weeks’ notice before the starting date of any industrial action; and
  • Any picketing organised by a trade union must be supervised by a person appointed by the union who is familiar with the statutory code of practice relating to picketing.

These new rules have been introduced to try and reduce the number of industrial actions undertaken by trade unions.

Apprenticeship Levy

The next change, having an effect on larger employers, is the introduction of a new charge known as the ‘apprenticeship levy’. From 6th April 2017, all UK employers with annual salary bills of more than £3 million will pay will pay an apprenticeship levy. The levy works by imposing a 0.5% charge on all employer annual wage bills. Each employer will receive an allowance of £15,000 per year to offset against the levy.

This levy will be collected from the employers through PAYE, payable alongside Income Tax and National Insurance.

The funds generated will then be used to boost funding to new apprenticeships across the UK.

Employment of Foreign Workers

Finally, another new charge coming into force on 6th April is the ‘immigration skills charge’. This will be imposed on employers who employ workers from outside the European Economic Area through the Tier 2 visa route. The charge is aimed at encouraging businesses to employ more employees from within the UK.

Employers will be required to pay £1000 per year for each Tier 2 migrant worker they sponsor/ employ, with a reduced rate of £364 per year per migrant worker for smaller employers or charities. There are some tier 2 migrant workers exempt from the charge and these are set out in regulation 4 of the Immigration Skills Charge Regulations 2017.

The funds obtained from this charge will be invested into training programs which will improve the labour market in the UK generally.

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