2018 is already shaping up to be a key year for employment law updates. With several changes already in effect, read on for the latest in UK employment law in 2018, and to find out when more updates will be coming in soon.
- 7 self-employed tax changes you need to know about for 2018
- How does VAT affect small businesses
- A guide to GDPR for small businesses
- What is business insurance?
While these employment law changes are some of the important ones for this year, there may still be further updates announced. With the list and the table below, though, we point you towards the news and laws you need to comply with – and what to watch out for.
Employment law updates 2018: deadline dates
Some of these deadlines have already passed. If you’re not up to speed on what you need to do, read through the sections below and close your employment law gaps.
|Employment law updates 2018||Date|
|Immigration changes||January 2018|
|Gender pay gap||April 2018|
|Statutory rates||April 2018|
|The new national minimum wage||April 2018|
|The new national living wage||April 2018|
|Increased auto-enrolment contributions||April 2018|
|Taxation of termination payments||April 2018|
|Restricting employment allowance for illegal workers||April 2018|
Immigration changes (January 2018)
There were a number of changes to immigration rules introduced on 11 January 2018. A key one for employers relates to Tier 2 visa holders.
Previously, there was a rule that meant if Tier 2 holders had a 60 day gap in employment, they couldn’t apply for Indefinite Leave to Remain (ILR). Tier 2 (General) visa holders now don’t need to have had continuous employment throughout the five years employment required for ILR.
Non-PhD students also now have flexibility to switch to Tier 2 as soon as they’ve finished their courses. For employers, this means you won’t have to wait for their results to be published in order to sponsor them.
Gender pay gap (April 2018)
Private sector employers in England, Wales and Scotland with at least 250 employees needed to publish information about the pay gap between male and female employees by 4 April 2018. Public sector employers needed to publish their data in March 2018.
As we reported last year, most businesses we insure have fewer than 250 employees. However, you can still report voluntarily if you want to.
Employers needed to publish their gender pay gap data, plus a written statement, on their website, and report online using gov.uk’s gender pay gap reporting tool.
Statutory rates (April 2018)
You can use these weekly rates as a guide when calculating your employees’ statutory payments.
|Pay type||Weekly rate|
|Lower earnings limit||£116|
|Redundancy pay||£508 maximum (based on weekly pay)|
The maximum compensatory award for unfair dismissal has also increased to £83,682, from £80,541.
National minimum and national living wage (April 2018)
There are new rates for the national minimum and national living wage.
|25 and over||£7.83 (national living wage)|
|21 to 24||£7.38|
|18 to 20||£5.90|
|16 and 17||£4.20|
Increased auto-enrolment contributions (April 2018)
The minimum employer contributions for pension auto-enrolment increased to 2 per cent on 6 April 2018. The amount that employees need to put in is 3 per cent.
In April 2019, the employer contribution will increase to 3 per cent (employees will need to contribute 5 per cent).
Taxation of termination payments (April 2018)
New rules on how termination payments are taxed came into force on 6 April 2018. These new rules apply to any termination that happened on or after that date.
The new rules mean that all notice pay should now be treated as earnings and subject to tax and national insurance contributions. This is on all payments in lieu of notice (PILONs), rather than just contractual PILONs.
Restricting employment allowance for illegal workers (April 2018)
The government has introduced a restriction designed to deter employers hiring illegal workers.
This restriction is on the employment allowance, which you won’t be able to get for one year if you’ve hired an illegal worker, been penalised by the Home Office and exhausted all appeal rights against that penalty.
GDPR (May 2018)
In a nutshell, the General Data Protection Regulation (GDPR) is designed to strengthen existing data protection laws. They apply to all EU member states from 25 May 2018.
These have been on the horizon for some time, and we have a comprehensive guide to the new rules for small businesses, so make sure you take a look.
GDPR is intended to give people more control over their personal data. For businesses, it means stricter regulations and tougher fines.
It applies to any business that processes the personal data of EU citizens, including those with fewer than 250 employees. Read our guide for all the info you need.
Future UK employment law updates
There are still some employment law changes to look out for. These include:
Parental Bereavement Bill: this bill is currently going through Parliament. It gives employees the right to two weeks leave if they lose a child under the age of 18, paid at the statutory rate if they have 26 weeks’ service. The government wants this to be in force by 2020.
Grandparental leave: back in 2016, the government said it wanted to extend shared parental leave and pay to working grandparents by 2018. The current government hasn’t announced any plans to pursue the policy, however.
Private sector IR35 reform: IR35 reform has already been rolled out to the public sector, which gives responsibility for reporting a contractor’s employment status to the client. It could hit the private sector soon – even though there’s some controversy about how effective it’s been.
Have you needed to make changes for any of these UK employment law updates? Tell us about your experiences in the comments below.