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Employment law changes to look out for in 2018


Employment law changes to look out for in 2018

Looking at the raft of employment law changes that are set to come into effect in 2018, it certainly looks like a busy year ahead for the employers.

To help you plan ahead, we have listed some of the major employment law changes taking place this year.

 National Minimum Wage and National Living Wage- 1 April 2018

Current rates and rates from 1 April 2018 of the National Living Wage and the National Minimum Wage are:


25 and over

21 to 24

18 to 20

Under 18


April 2017 (current)






April 2018







Apprentices are entitled to the apprentice rate if they’re either:

  • aged under 19
  • aged 19 or over and in the first year of their apprenticeship

Apprentices are entitled to the minimum wage for their age if they both:

  • are aged 19 or over
  • have completed the first year of their apprenticeship

Gender pay gap: First reporting - 4 April 2018

Private and voluntary sector employers with at least 250 employees will be required to publish their first gender pay gap report by 4 April 2018, giving information about the differences in pay between men and women in their workforce. Similar reporting requirements apply to larger public sector employers from 31 March 2017 and the first reports are due by 30 March 2018.

The reports will cover pay data from 2016 to 2017, including the differences in mean pay, median pay, mean bonus pay and median bonus pay between male and female employees.

New statutory rates- April 2018

Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from April.

Statutory sick pay (SSP) is due to rise this month from £89.35 to £92.05.

The lower earnings limit will rise from £113 to £116.

Taxation of PILONs and Termination Payments: 6 April 2018

The government plans to make changes to the taxation of contractual and non-contractual PILON (pay in lieu of notice) payments. The proposals include:

  • removing the distinction between contractual and non-contractual PILONs so that all PILONs are taxable and subject to Class 1 NICs
  • maintaining the first £30,000 of a termination payment as exempt from income tax
  • keeping any payment solely related to the termination of employment free of employee NICs
  • aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax).

The government intended to make all these changes in April 2018, but has now decided that changes to the treatment of employers’ NICs on termination payments will be delayed by a year until April 2019. Changes to the way PILONs are taxed and subject to NICs is expected to come in on 6 April 2018 as planned.

Restricting Employment Allowance for Illegal Workers- April 2018

The government plans to introduce a further deterrent to the employment of illegal workers. From April 2018, employers will not be able to claim the Employment Allowance for one year if they have:

  • hired an illegal worker
  • been penalised by the Home Office
  • exhausted all appeal rights against that penalty.

General Data Protection Regulation- 25 May 2018

The European General Data Protection Regulations (GDPR) are set to come into force across Europe on 25 May 2018.

The GDPR strengthens existing data protection rules through a number of measures, including:

  • an expansion of individual data protection rights, including the right to be forgotten
  • toughening the rules on individual consent to processing sensitive data
  • shortening the time scale for responding to ‘subject access requests’ from 40 days to one month, and removing the £10 fee
  • requiring organisations to report any data breaches which ‘risk the rights and freedoms of the individual’ to the regulatory authority and, where there’s a high risk of this, to the individual affected as well.

On 13 September 2017, the government introduced a new Data Protection Bill. This Bill will come into force on 25 May 2018 and will transfer European Union’s General Data Protection into UK law. This law will empower the public to have greater control over personal data- including right to be forgotten as well as give them the right to require social media platforms to delete information on children and adults when asked.

Breaches of the GDPR may lead to fines of up to 20 million Euros or 4 per cent of global turnover, whichever is the greater. 


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