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What to expect in 2017

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As the new term starts and the school plays and Christmas fairs of last term become a distant memory, we take look ahead to the developments in employment law and HR that are expected for 2017.

National Minimum Wage increases

On 1 April 2017, the National Minimum Wage rates will increase.

Following the introduction of the National Living Wage in April 2016, there are 5 different rates; the National Living Wage, the Standard Adult rate, the Development rate, the Young Workers rate and the Apprentice rate.

For the first time, the Standard Adult rate will exceed the £7 barrier as it increases from £6.95 per hour to £7.05 per hour. The highest rate, which is the National Living Wage for those aged 25 and over, will rise to £7.50 per hour.

For employers using uniform pay scales across their organisation, they should consider what impact the increases in the National Minimum Wage could have all the way up the pay scale and how this can be managed to minimise the impact on their budgets.

Apprenticeship levy to be introduced

The new Apprenticeship levy is due to be introduced in April 2017. This will require all employers in the UK with an annual wage bill of more than £3 million to pay 0.5% of their annual wage bill towards the cost of apprenticeship training.

In maintained schools, where the employer is the local authority, there would not be a direct obligation on the school to pay the levy out of school funds. However, local authorities will have wage bills in excess of £3 million and it is yet to be seen how they will choose to fund this additional cost.

It is possible that they could require each school to pay a proportion of the levy towards the overall cost. In non-maintained schools and other educational establishments with wage bills of more than £3 million the levy would be applied. Whilst there
may still be some single academy trusts and smaller multi-academy trusts with lower wage bills, the current trend towards the larger multi academy trust model is likely to mean that more and more employers within the Education sector will be subject to the levy over time.

New tax-free childcare scheme

It is expected that in early 2017 the Government will start to roll out its new tax-free childcare scheme, which is due to replace the current childcare voucher system by 2018.

There is likely to be a significant transitional period during which both schemes will be in use as those already benefitting from childcare vouchers and those that sign up for them prior to April 2018 will still be entitled to receive them.

Grandparental leave

There has been speculation for some time about how and when working grandparents will be given the right to time off to care for their new grandchildren. It is anticipated that this will take the form of them being able to share the parental leave already available to mothers and fathers. However, a consultation into the introduction of this new right, originally scheduled for May 2016, was put on hold until after the EU referendum.

Now that the referendum is over, this consultation is expected to happen in 2017. Whilst it is likely that no changes will be introduced until 2018, this year we may get a little more information about the way in which ‘grandparent leave’ can be taken and which employees would be eligible.

As well as the above, anticipated changes there are likely to be many more developments in employment law and HR throughout the year, especially as plans and timetables around ‘Brexit’ become clearer. We will keep you up to date with these as further details are released.

If you would like any further advice on any aspect of employment law, please contact a member of the team on 01332 227596 for a confidential chat.

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Derby Head Office:
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