Posted by Fleur Lewis on July 14, 2017
Business owners and employees have a lot to contend with when trying to understand changes in employment law, pensions and payroll. And that is no different for the marine sector. There appears to be no respite in developments, with more on the way.
The Great Repeal Bill (or the “GeRBil” as it is affectionately known) will, over the next two years, set out key employment changes as a result of our leaving the EU.
It seems likely that existing EU regulations on such matters as working time, holiday accrual whilst on sick leave, and the Transfer of Undertakings (Protection of Employment) rules will all continue post Brexit. We can, though, expect some minor tweaks in the rules as the government attempts to use its so-called Henry VIII powers to shape future UK employment law.
Our current monarch delivered the Queen’s Speech in June that made reference to the above-mentioned Brexit-related changes in employment rules, and it also proposed that the National Living Wage (currently £7.50 per hour for those aged 25+) increase to 60 per cent of median UK earnings by 2020. Employers will need to budget for this increase in their business plans. Although there was no mention of extending the increase to the other rates of the National Minimum Wage, it would be imprudent to discount this possibility.
At the recent general election the Conservative manifesto indicated that employers would in future be required to publish more data on the gender pay gap, and possibly ethnicity pay, though the timing of this is not clear. We can therefore expect to see tighter rules on pay reporting in future, particularly for larger employers.
With most firms now having a workplace pension in place, they should be aware that from 6 April 2018 the minimum amount employers can contribute to a staff pension scheme will be 2% of pay, and for employees the contribution rises to 3%. These figures will rise again from 6 April 2019 to 3% from the employer and 5% from the employee. In addition, from October this year all new employers will have automatic enrolment duties from the date they hire their first member of staff.
Major changes in employment practice and tax rules are likely as a result of the publication this month of the Taylor Review into the gig economy, which calls for restrictions on zero-hour contracts, recommends employee benefits for casual workers and urges clarity in the law on employment status.
Although the Review has not called for an outright ban on zero-hour contracts, it does recommend that some workers are reclassified as "dependent contractors", rather than being employees or self-employed, in order to secure certain benefits such as sick and holiday pay – and are paid a “fair rate” per job. The review also recommends that the law is changed to allow a worker taking a case to tribunal be offered a free initial adjudication on employment status.
Parts of the report will be welcomed by employers as it recommends the government should avoid further increases in the non-wage costs of employing a person, such as the apprenticeship levy.
The review may also find favour with self-employed workers as it recommends they benefit from maternity and paternity leave in return for paying a little more in national insurance Contributions (NICs). Interestingly, the government has already made clear it is not going to reintroduce the abandoned hike in self-employed Class 4 NICs announced by the Chancellor earlier this year.
Quite what the government will do to implement the Taylor Review’s many recommendations remains to be seen, though it will probably seek cross-party support before doing so.
Finally it is worth noting that the UK economy benefits greatly from having one of the most flexible labour markets in the world. It is to be hoped therefore that as the government seeks to introduce more changes in employment tax and law, it does so in a way that makes the law clearer and more accessible to all.
This article first appeared in Boating Business.