The following is a summary of new legislation and what is coming up to ensure that you remain aware of developments that could impact your business going forward.

Termination payments

Currently, an employer is able to make an ex-gratia payment of up to £30,000 on termination of an employee's employment without deductions for tax or national insurance. After that, income tax applies but not NI contributions.

It was announced in August 2016 that these rules will be revised with effect from April 2018 so both tax and employer's NI will become payable above the £30,000. This will make things more expensive for employers making termination payments, although the total termination payment will still be exempt from employee's NI.

Payments in lieu of Notice (PILONs)

A further proposed change to the tax treatment of payments made on termination of employment relates to PILONs. Broadly speaking, the position at the moment is that where an employer does not have a contractual right to make a PILON and does not habitually make PILONs when employees leave, then the PILON may be exempt from tax within the £30,000 band (see above). It is now proposed that all PILONs will be taxable. If this is brought into effect, there will no longer be a reason not to have a contractual right to make a PILON, giving employers more flexibility to do so where they do not require employees to work their periods of notice.

Employers may want to review contracts of employment and update notice provisions.

Gender Pay Reporting

New legislation on gender pay reporting was brought into force in August 2016, although the final parts of the new legislation are not now expected until April 2017 (the original date was October 2016).

It is understood that employers with 250 or more employees will become compelled to analyse gender pay gap data (being the difference in levels of pay between men and women at the same employer) and publish their results. It is expected that the first analysis will be required as at 30 April 2017 and the first report will need to be published a year later.

However, savvy employers will want to consider their analysis early and take steps to ensure any pay gaps are equalised or can be explained, before they have to expose the data and run the risk of potential equal pay claims being brought by disgruntled employees.

Brexit

No news round up would be complete without a mention of Brexit. We all await details on when and how Britain will exit Europe but certainly some changes to employment law are likely in the long term.

There has already been some speculation about changes being made to the rules on working time, the transfer of businesses (often known as TUPE transfers) and the rights of agency workers. However, laws relating to discrimination and unfair dismissal are perhaps unlikely to be amended. No one knows what the future may hold but employers will want to keep an eye on developments in this area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.