Employment Briefing - 2018: What's Coming?
6th February 2018
- Data Protection
- Taxing Termination Payments
- Tribunal Access
- Auto Enrolment
- Living and Minimum Wage Increase
- Equal Pay Claims
Welcome to our first Employment briefing of 2018.
If you have any questions about any of the topics covered, or would like to meet with our Employment team, please call Martin Stephen on 0141 248 3434 or email email@example.com
The General Data Protection Regulation (GDPR) will be coming into force in May 2018. The GDPR introduces tougher fines for non-compliance and breaches, and gives people more say over what companies can do with their data.
The GDPR applies to ‘Controllers’ and ‘Processors’. A data controller states how and why personal data is processed, while a processor is the party doing the actual processing of the data. So the controller could be any organisation, from a profit-seeking company to a charity or government department. A processor could be an IT firm doing the actual data processing. Even if controllers and processors are based outside the EU, the GDPR will still apply to them so long as they're dealing with data belonging to EU residents.
It's the controller's responsibility to ensure their processor abides by data protection law and processors must themselves abide by rules to maintain records of their processing activities. If processors are involved in a data breach, they are far more liable under GDPR than they were under the Data Protection Act.
Taxing Termination Payments
In April 2018, the treatment of taxation of termination payments in respect of payments in lieu of notice will change. Currently, it is possible to pay non-contractual payments in lieu of notice as damages payments, not subject to tax.
From April, all such payments will be subject to income tax and National Insurance deductions, whether contractual or not. Either the employee – in accepting reduced sums – or the employer – in "grossing up" the payment will be financially affected by this.
Predictably, the scrapping of the fees regime has already increased claims brought to the Employment Tribunal. Some figure suggesting the increase is in the region of 64%. Clearly there will be many more claims brought in the employment tribunal during the course of 2018.
On 20th October the Government announced a phased fees refund scheme. As well as being refunded their original fee, successful applicants to the scheme will also be paid interest of 0.5%, calculated from the date of the original payment up until the refund date. The scheme has now been rolled out and anyone can apply for a fee refund.
On 6 April 2018, there will be an increase to minimum auto enrolment pension contributions for both employers and employees. The current minimum contribution for both parties is 1% but this will increase to 2% employer contribution and 3% employee contribution next April. There is then a further increase scheduled in 2019 for a 3% employer contribution and 5% employee contribution.
Living and Minimum Wage Increase
Living and minimum wage rates will increase on 1 April 2018. The national living wage for workers aged 25 and over is expected to be increased to £7.83 (from the current rate of £7.50).
Equal Pay Claims
Equal pay claims in the private sector are expected to increase, particularly given the deemed success, so far, of claims brought against supermarket giants Asda and Sainsbury’s.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at February 2018. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.