Gender pay gap reporting established

BOND ADAMS EMPLOYMENT UPDATE by Dispute Resolution Partner, Rafique Patel

Employers with 250 or more employees will be required to publish details of their gender pay gap and gender bonus gap on a yearly basis.

 

It is expected that the first reports will need to be published by April 2018.

However, the pay information will need to be based on payments made over the employer’s pay period every April, beginning in April 2017.

 

The bonus information will need to cover the preceding 12-month period, beginning with the 12 months leading up to April 2017.

 

Although gender pay gap reporting legislation does not come into force until early 2017, employers may have to collect gender pay gap data from as early as April 2016. HR professionals can use this timeline to get ready for their reporting obligations.

 

Now: Check that your organisation collects the data needed to conduct gender pay gap reporting. Information must be collected on employees as defined under s.83 of the Equality Act 2010, which includes apprentices and workers who have a contract personally to do work.

 

Consider if additional data would be useful for internal analysis of gender pay gaps. For example, it may be useful to gather figures on the gender profile of your organisation, bonus trends across your organisation, or your organisation’s historical gender data in order to understand gender pay gap results.

 

Consider conducting a test gender pay gap analysis based on data from prior years. This will confirm that your organisation is ready to meet regulatory requirements. It will also allow your organisation to anticipate gender pay gap results and begin to address any potential concerns.

 

5 April 2016:  Begin to collect data for the first reporting period. As bonus pay data includes payments from the year preceding 5 April 2017, you may need to collect figures on bonus payments from as early as 5 April 2016. Pay data covers payments for the April 2017 pay period.

 

 

Early 2017: The Equality Act 2010 (Gender Pay Gap Information) Regulations for private and voluntary-sector employers are expected to come into force around this time. They will require all private and voluntary-sector employers with 250 or more employees to publish prescribed information about their gender pay gap results.

 

6 April 2017: Begin to carry out calculations to determine your gender pay gap results.

 

4 April 2018: Publish the results of the gender pay gap analysis on your organisation’s website by 4 April 2018. The results must be posted in a publicly accessible manner. A signed statement that the information is accurate must accompany the results and the results must remain on the website for at least three years.

 

Upload the gender pay gap analysis results onto the Government’s reporting website.

Although commentary on the gender pay gap results is not required, organisations should consider adding a narrative to help employees and the public understand their results, particularly in cases where gender pay gaps seem significant. Alternatively, commentary can help highlight an organisation’s strong performance relative to its competitors.

Consider creating an action plan to address gender pay gaps. Although this is not required, it is encouraged by the Government in pursuit of gender equality in the workplace.

 

 

For advice on all aspects of employment law including representation in the employment tribunal, representation in the Employment Appeal Tribunal and the courts, contact our partner Rafique Patel on rafique.patel@bondadams.com

Immigration skills charge comes into force

BOND ADAMS EMPLOYMENT UPDATE by Dispute Resolution Partner, Rafique Patel

The Government aims to reduce employers’ reliance on migrant workers, by imposing a visa levy on organisations that sponsor workers from outside the European Economic Area and Switzerland.

The Government has indicated that the immigration skills charge will be implemented in April 2017.

From April 2017 employers who sponsor a migrant worker for a Tier 2 visa will be required to pay an ‘immigration skills charge’ of £1,000 per migrant, per year.

 

A reduced rate of £364 will apply to small businesses and charities. There will be exemptions for PhD-level roles and for international graduates switching from a student visa to their first work visa, as well as for intra company transfer graduate trainees. There is no exemption for jobs on the shortage occupation list.

 

The charge is being introduced through the Immigration Bill 2015/2016. It will be payable in addition to the Apprenticeship Levy, which comes into force at the same time.

 

The Home Office will collect the monies, although it is unclear exactly how. The Government wants to ensure that the employer, rather than the migrant, pays the charge. We anticipate that the full amount will be payable up front, rather than on an annual basis, probably when a Certificate of Sponsorship (CoS) is assigned to a migrant by an employer through their sponsor management system. It remains to be seen whether reimbursement will be available if the migrant fails to successfully apply for a visa, or if their sponsored employment ends earlier than planned.

 

We anticipate that the charge will be levied whenever an employer assigns a Tier 2 CoS. Although unconfirmed, we do not expect it to be payable for migrants who already have their visa, until this falls for renewal. This may lead employers who are sponsoring migrants between now and April 2017 to apply for an initial five year visa, rather than a three year visa, to avoid the charge. We also expect a surge in visa applications in March 2017, as employers encourage workers whose visas are due to expire shortly after the charge comes into force, to renew earlier than usual.

 

The Government says the charge “is designed to cut down on the number of businesses taking on migrant workers and incentivise training British staff to fill those jobs.”

 

It has been set at a level which makes it significantly more expensive to hire a migrant worker. This is in addition to the introduction of higher minimum salary thresholds. But higher salaries only benefit employees, whereas the skills charge will go to the Treasury. The hope is that employers may instead prefer to invest the money in training a British worker, but if they do not, the extra payment can go towards skills programmes.

 

However, the Government has not yet offered any guarantee that monies collected will be invested in skills training for settled workers. We await a response to the suggestion of the Migration Advisory Committee (MAC) in its report of 18 December 2015, that a levy and grant system should be introduced, with rebates for those employers who demonstrate investment in training.

 

There has already been a backlash from businesses who perceive the charge as a further tax. They argue that employers do not recruit migrants because they are unwilling to train local workers, but because they have an urgent need to meet, or because a particular individual offers something extra.

 

Concerns have also been raised regarding the cost to the public sector, which currently relies on migrants to fill nursing and some teaching posts. The Government will carry out a consultation before the charge is implemented and we may yet see some concessions, for example a gradual phasing in for NHS employers.

 

The Government has long been encouraging employers to anticipate and address skills shortages. Whilst the skills charge means it is now wielding a bigger stick, the jury is out on whether the charge will bring about the desired behavioural change in recruitment, or make a meaningful contribution towards up-skilling British workers.

 

 

For advice on all aspects of employment law including representation in the employment tribunal, representation in the Employment Appeal Tribunal and the courts, contact our partner Rafique Patel on rafique.patel@bondadams.com

Employers using foreign workers illegally face closure

BOND ADAMS EMPLOYMENT UPDATE by Dispute Resolution Partner, Rafique Patel

In an attempt to stop employers turning a blind eye to illegal working, new powers are introduced to serve employers with a closure notice where illegal working is suspected. This will prevent access to the firm’s premises for a maximum period of 48 hours.

 

A further order can then be made to prohibit or restrict access to the employer’s premises for a period of 12 months.

 

Again, there is no confirmed implementation date, but it is widely expected that these new powers will be created soon.

 

UK border officials will be given powers to temporarily close businesses that break the law by giving jobs to illegal immigrants, under new measures announced

 

The move comes as ministers are seeking to toughen curbs on rogue employers in response to fears that African and Middle Eastern immigrants are forcing their way into the UK from camps in the French port of Calais.

 

The restrictions, to be included in this autumn’s immigration bill, include creating a new criminal offence of illegal working, which will carry a jail term of up to six months, as well as giving authorities the power to seize earnings from illegal migrants.

 

Late-night takeaway shops and alcohol stores face revocation of their licences to sell food and alcohol if they are found to be employing foreigners who are in the UK without authorisation. Any business that repeatedly hires illegal migrants will be subject to 48-hour closures while border officials investigate.

 

Explaining the stricter rules, James Brokenshire, immigration minister, said the Home Office would continue to root out abuse and build a border system that works “in the best interests of the British people and those who play by the rules”.

 

“Anyone who thinks the UK is a soft touch should be in no doubt: if you are here illegally, we will take action to stop you from working, renting a flat, opening a bank account or driving a car,” he said.

“Through our new immigration bill, illegal workers will face the prospect of a prison term and rogue employers could have their businesses closed, have their licences removed, or face prosecution if they continue to flout the law.”

 

Estimates of the numbers of illegal immigrants in the UK vary considerably and the true figure could be anywhere between 420,000 and 860,000, according to the Oxford Migration Observatory.

But given the growing crisis in Calais — where up to 5,000 migrants from countries such as Iraq, Syria and Eritrea are sleeping rough while waiting for a chance to enter Britain — the government is under pressure to show it is taking action against those who manage to get in. The Home Office announced this month that border enforcement teams would carry out more raids on workplaces to identify and prosecute employers harbouring illegal workers.

 

The Labour party was, until recently, in the vanguard of support for tougher action on illegal immigration. Its election manifesto included proposals for a law to stop employers undercutting wages by exploiting migrant workers and an extension of the Gang masters Licensing Authority’s remit to seek out abuse.

The Conservatives have been more proactive on the issue since returning for a second term in government, adopting some of the opposition’s policies for their own immigration bill.

 

The Tories are battling to reduce the number of foreign arrivals in line with their renewed pledge to drive down net migration from 318,000 in 2014 to “tens of thousands”. However, official statistics due to be published this week are expected to show the overall figure remaining stubbornly high.

 

 

For advice on all aspects of employment law including representation in the employment tribunal, representation in the Employment Appeal Tribunal and the courts, contact our partner Rafique Patel on rafique.patel@bondadams.com

National minimum wage increases for some age bands

BOND ADAMS EMPLOYMENT UPDATE by Dispute Resolution Partner, Rafique Patel

The national minimum wage for workers aged under 25 but at least 21 rises to £6.95 per hour. The rate for workers aged at least 18 but under 21 is raised to £5.55 per hour; the rate for workers aged under 18 who are no longer of compulsory school age goes up to £4.00 per hour; and the apprentice rate increases to £3.40 per hour.

The changes were applied on 1 October 2016. The national living wage, the national minimum wage rate for workers aged 25 or above, is unaffected.

But this is the last time to expect minimum wage hikes in the autumn. Future changes to the national minimum wage and the national living wage will take place at the same time in April each year, from April 2017.

National Minimum Wage and National Living Wage

The National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law. The rate will depend on a worker’s age and if they are an apprentice.

The National Living Wage

The Government’s National Living Wage was introduced on 1 April 2016 for all working people aged 25 and over, and is set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 still applies.

Key points

• Most workers over school leaving age will be entitled to receive the NMW.

• The NMW /NLW rate is reviewed annually by the Low Pay Commission.

• HM Revenue & Customs (HRMC) can take employers to court for not paying the NMW/NLW.

• There are a number of exemptions to those who receive the NMW/NLW. These do not relate to the size of the business, sector, job or region.

• The compulsory National Living Wage is the national rate set for people aged 25 and over.

Rates of pay

It is important to note that these rates, which came into force 1 October 2016, apply to pay reference periods beginning on or after that date.

The rates from 1 October 2016 are:

• £7.20 per hour – 25 yrs old and over

• £6.95 per hour – 21-24 yrs old

• £5.55 per hour 18-20 yrs old

• £4 per hour – 16-17 yrs old

• £3.40 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

The rate will then change every April starting April 2017.

The rates from 1 October 2015 were:

• £6.70 for workers 21 and over

• £5.30 18-20 yrs

• £3.87 for 16-17 yrs, who are above school leaving age but under 18

• £3.30 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

Minimum Wage and National Living Wage – an overview

The new pay rate will only affect someone’s pay from the first full pay reference period after that date.

For example:

If the Pay Reference Period starts on the 19 March – 19 April- the pay between the 1 April – 18 April will be based on the NMW rates- The allocated pay from the 19 April – 19 May would be at the new NLW rate because this is the first full pay reference period after the 1 April.

The same rules apply when a monthly paid employee reaches the age of 25. For example if the employees birthday falls on the 25 May and the next pay reference period starts on 10 June, the employee is entitled to receive the NLW pay rate on the 10 June and not their birthday.

Exemptions

There are a number of people who are not entitled to the NMW/NLW.

• Self-employed people.

• Volunteers or voluntary workers.

• Company directors.

• Family members, or people who live in the family home of the employer who undertake household tasks.

All other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the NMW.

 

Agricultural Wages

Agricultural and horticultural workers in England employed after 1st October 2013 must be paid the appropriate NMW rate (see above).

Workers who were already employed before 1 October 2013 will still be entitled to the same terms and conditions set under their contract of employment; this may include overtime rates, agricultural wages, sick pay or dog allowance. DEFRA will continue to enforce complaints made by workers in respect of underpayments or non-compliance with terms and conditions of an Agricultural Wages Order before 1 October 2013 for up to six years after the breach occurred.

For agricultural workers in Scotland there is no change, and in Wales workers must be paid at least the Agricultural Minimum Wage, or the NMW if that’s higher.

Family member exemption

For this exemption to apply, workers must either be a member of the employer’s family, or live in the employers’ family home.

Either the worker is a member of the employer’s family and:

• resides in the family home of the employer

• shares in the tasks and activities of the family.

Or the worker resides in the family home of the employer, and:

• is not a member of that family, but it treated as such (in regards to the provision of living accommodation, meals and the sharing of tasks and leisure activities)

• is neither liable to any deductions, nor to make any payment to the employer, or any other person, as respects the provision of the living accommodation or meals.

• if the work had been done by a member of the employer’s family, it would not be treated as work.

Non-payment of the NMW

It is against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records.

If an employer doesn’t pay the correct rate, a worker should talk to their employer and try to resolve the issue informally first. If this doesn’t work a worker may make a formal grievance to their employer.

A worker can make a complaint to HMRC who will investigate the complaint. If HMRC find that an employer hasn’t paid at least the National Minimum Wage, they can send a notice of arrears plus a penalty for not paying the correct rate of pay to the worker.

Penalties for failure to comply with the National Living Wage

With the introduction of the National Living Wage the penalty for non-payment will be 200% of the amount owed, unless the arrears are paid within 14 days.

The maximum fine for non-payment will be £20,000 per worker. However, employers who fail to pay will be banned from being a company director for up to 15 years.

The difference between the National Living Wage and the Living Wage

The new National Living Wage is different from the Living Wage, which is an hourly rate of pay and updated annually. The Living Wage is set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK. Employers choose to pay the Living Wage on a voluntary basis.

Working Time Directive – Mobile workers – September 2015

The European Court of Justice in a case gave the judgement that mobile workers who have no fixed place of work, and spend time travelling from home to the first and last customer, should have this time considered as working time. The Court add that because the workers are at the employer’s disposal for the time of the journeys, they act under their employer’s instructions and cannot use that time freely to pursue their own interest.

 

For advice on all aspects of employment law including representation in the employment tribunal, representation in the Employment Appeal Tribunal and the courts, contact our partner Rafique Patel on rafique.patel@bondadams.com

Employment Law – Apprenticeships

Employment law – Apprenticeships

What is the apprenticeship levy?

Set to come into force in April 2017, the Apprenticeship Levy was initially introduced by the government in the 2015 budget, with the intention of investing £2.5 billion in apprenticeships by 2020. It proposes to apply a levy of 0.5% on employer annual pay bills over £3 million, with the money raised being used to support both large and smaller employers to provide approved apprenticeship schemes.

So what has changed in the new proposal?

Small businesses with a payable bill of less than £3 million will have 90% of the training fees for apprentices paid on their behalf. This support will be extended for apprentices between the ages of 16 to 18, as employers will receive around £2,000 more per apprentice.

Larger levy-paying businesses will be able to access similar support if they take on apprentices and the costs exceed the funds in their digital account (where their allocated funding for apprenticeships will be held).

The new proposals also set out a cap of between £1,500 and £27,000 on the amount of digital funds an employer is able to allocate to each individual apprenticeship. The precise figure is determined by the ‘funding band’ in which the apprenticeship falls. Employers will be required to negotiate prices with apprenticeship providers to keep within these funding limits.

What do these updates mean for employers?

Levy funds will be open to use on any training which the employer considers to be beneficial, meaning businesses should in theory have greater control over their apprenticeship programmes. It is hoped that alongside the new published list of training providers, the changes will improve relations between employers and providers and the calibre of apprenticeship programmes being offered.

The new updates promise to bring flexibility and control over apprenticeships, and to a certain extent, they will. The provision of the list of providers will clarify the options available to employers and potentially lead to more focussed training for specialist skills. There are however limitations to these advantages, as it is proposed that the funding will only be used for training apprentices and not for future costs such as paying their wages. The government will also only allow employers to use approved training providers and assessment organisations, narrowing the scope of the training on offer.

A full summary of the proposed new funding model for apprenticeships can be found on the government website

Should you require further advice, guidance or support about the apprenticeship levy, please contact us below:

Richmond House
94 London Road
Leicester, LE2 0QS

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