Significant law changes could radically impact on businesses following the introduction of the Apprenticeship Levy and the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, according to solicitors firm Blanchards Bailey.
The Government’s long-awaited Apprenticeship Levy came into force on 6 April - with payments starting this month - and sees any business with total employee earnings of more than £3m having to pay 0.5% of their payroll costs towards the levy.
The new legislation applies to companies in the public sector, not-for-profit organisations, charities and schools, as well as private businesses. While many businesses have been preparing for the levy for months, several recent surveys, including one from the British Chambers of Commerce, have revealed large numbers of employers were not aware of the levy.
Under the new law, qualifying companies stand to benefit from a £15,000 allowance available for each tax year, which can be used to offset levy payments. However, the recent research also revealed that many companies had no plans to recoup any of the levy contribution they will have to pay. After registering and paying the levy, companies can access funding through a Digital Apprenticeship Service account.
The Government will continue to co-fund apprentices by paying 90% of the training costs of those organisations who fall below the levy threshold.
The new Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which also came into effect on 6 April, requires all businesses with 250 employees or more to publish details on the differences between the salaries they pay their male and female staff.
Latest figures from the Office for National Statistics show the gender pay difference is 9.4%, which has resulted in many businesses coming under the microscope. The purpose of the new legislation is to encourage businesses to pay men and women equally when carrying out identical roles by bringing them under public pressure.
Publishing unfavourable statistics or failing to publish any at all is likely to have an adverse effect on the reputation of those businesses, restrict their ability to recruit staff and attract unwanted press attention. Failure to report on the data could also result in the Equality and Human Rights Commission taking punitive action.
Private sector employers are required to publish the results on both their website and a designated government website by no later than 4 April 2018, while public sector organisations only have until 30 March 2018. Results will then need to be updated on an annual basis.
Blanchards Bailey HR Manager and Consultant Jane Eldridge said: “It seems many companies do not know about the new law changes. Greater awareness is needed so that businesses are clear where they stand so that they can comply. With the Apprenticeship Levy, there is obviously a lot to digest in order to make sure you adhere to the new legislation, as well as get the most out of it.
“Those that invest in training will benefit most but it is important to consider how many and which apprenticeships you will support and how you will recruit the apprentices, whether internally or externally, for example. Businesses should also think about finding suitable accredited training providers and registering for a Digital Apprenticeship Service.”
Speaking of the new gender equality legislation, Jane added: “Qualifying companies will have a choice: either pay men and women the same or face the consequences of the disparity being published publicly.”
For more information visit www.blanchardsbailey.co.uk
If you would like to discuss how Carswell Gould could help, our team of experts are keen to chat. Fill in your details below and we'll be in touch shortly.
