April 16, 2015
As well as the regular changes to rates and limits, 5 April 2015 is the key date for the introduction of shared parental leave and a number of other family leave changes, some of which are consequential on the introduction of shared parental leave, some of which are not. These changes include: (1) abolition of additional paternity leave and additional statutory paternity pay, (2) extension of parental leave to cover children up to 17 years old, (3) time off for adoption appointments, (4) removal of the qualifying period of employment for adoption leave, (5) introduction of six week higher rate period of statutory adoption pay, (6) expansion of paternity leave, adoption leave and shared parental leave to cover fostering to adopt and surrogacy, (7) expansion of shared parental leave to cover adoption from abroad, (8) consequential renaming of ordinary paternity leave and ordinary statutory paternity pay and (9) new restrictions on the right to take paternity leave and adoption leave. From 6 April 2015 the following will also come into effect: (1) consolidation of the National Minimum Wage Regulations, (2) immigration rule changes, (3) changes to protected disclosures, (4) end of tax exemption for zero emission cars, (5) abolition of NICs for under 21s, (6) income tax changes and (7) changes to pensions qualifying earnings. This report provides a convenient summary reminder of those changes, with references back to our earlier news analysis reports where they were first communicated.
Set out below is a summary of the changes taking effect on 5 April 2015 or later.
Impact of changes
The following changes will take effect from 5 April 2015 (although in some cases these are subject to transitional provisions):
- increases in tribunal compensation limits
- statutory sick pay (SSP), statutory maternity pay (SMP) and other statutory pay increases (but note the maternity allowance prescribed rate will not increase until 6 April 2015)
- introduction of the shared parental leave and pay regime (available in respect of children expected to be born, or placed for adoption, on or after 5 April 2015)
- other family leave changes, some consequential on the introduction of shared parental leave and pay, some not
The following changes will take effect from 6 April 2015:
- consolidation of the National Minimum Wage Regulations 2015
- immigration rule changes
- changes to protected disclosures
- end of tax exemption for zero emission cars
- abolition of NICs for under 21s
- income tax changes, and
- changes to pensions qualifying earnings
Tribunal compensation limits to increase
From 6 April 2015, new increased compensation limits for employment tribunal claims will come into force, including:
- a revised figure of £475 (increased from £464) for the maximum amount of a week’s pay (used for calculating various awards including statutory redundancy payments and unfair dismissal basic awards), and
- a higher maximum unfair dismissal compensatory award of £78,335 (increased from £76,574)
SSP, SMP and other statutory pay increases
The increases to these statutory payments take effect from:
5 April 2015:
- the rate of statutory sick pay (SSP) will increase from £87.55 to £88.45 per week
- the standard rate of statutory maternity pay (SMP) will increase from £138.18 to £139.58 per week
- the standard rate of ordinary and additional statutory paternity pay, statutory adoption pay and statutory shared parental pay (OSPP, ASPP, SAP, SSPP) will also increase from £138.18 to £139.58 per week
6 April 2015:
- the rate for maternity allowance (MA) will also increase from £138.18 to £139.58 per week
- the weekly lower earnings limit that applies to National Insurance Contributions, below which employees are not entitled to SMP, SPP, ASPP, SAP, SSPP, SSP (but remain entitled to MA) will increase from £111 to £112 under the provisions of the Social Security (Contributions) (Limits and Thresholds) (Amendment) Regulations 2015.
Shared parental leave
Although the legislation underpinning shared parental leave and shared parental pay (including the Shared Parental Leave Regulations 2014) came into effect on 1 December 2014, the rights relating to shared parental leave and pay apply only in relation to children whose expected week of birth begins on or after 5 April 2015, or who are placed for adoption on or after that date.
The right to shared parental leave allows (in the case of birth) the mother of the child and a second person (who must be the father of child, or married to, or the civil partner of, or the partner of, that mother) to share (if they wish) up to 50 of the 52 weeks of leave to which the mother would otherwise be entitled as maternity leave. It therefore does not increase the overall amount of leave that may be taken; rather, it allows that entitlement to be shared between those two people.
Other family leave changes
There are a number of other family leave changes taking effect on 5 April 2015, some of which are consequential on the introduction of the shared parental leave and pay regime, some not:
- Abolition of additional paternity leave and additional statutory paternity pay: as a knock-on consequence of the introduction of the shared parental leave and shared parental pay regime, additional paternity leave and additional paternity pay are to be abolished except, under transitional arrangements, in relation to:
- children whose ‘expected week of birth’ ends on or before 4 April 2015, and
- children placed for adoption on or before 4 April 2015
- Availability of parental leave extended to cover children up to 17 years old: this right will be extended so that employees eligible to take parental leave will be able to exercise that right at any time before the child (whether born to the parents or adopted) turns 18
- Time off for adoption appointments: from 5 April 2015, rights parallel to those for pregnant women and their companions will be introduced to allow those adopting children to take time off during working hours to attend adoption appointments. Where there are two persons (each of whom may be an employee or an agency worker, who may or may not be working at the same workplace) who have been notified jointly that a child is to be, or is expected to be, placed for adoption with the two of them jointly, one of them will be entitled to paid time off and the other to unpaid time off to attend adoption appointments
- Removal of qualifying period of employment for adoption leave: the need to have accrued 26 weeks (or any other period) of continuous employment to gain entitlement to take ordinary adoption leave will be revoked. The effect of this will be:
- to make ordinary adoption leave a day one right for employees, with no service requirement: this brings it into line with statutory maternity leave
- to make additional adoption leave, in effect, a day one right as well, ie every relevant employee will potentially qualify for a period of up to 52 weeks’ leave in total when a child is placed for adoption with him or her; this, likewise, replicates the leave entitlement of an employee who gives birth to a child
- Introduction of six week higher rate period of statutory adoption pay: in relation to any adoption pay period which begins on or after 5 April 2015, statutory adoption pay will be paid (mirroring the mechanism that applies in the case of statutory maternity pay):
- at a different, potentially higher, rate for the first six weeks of the adoption pay period, called the ‘earnings-related rate’ (90% of normal weekly earnings), and
- using the existing method (i.e. the less of 90% of normal weekly earnings and the prescribed rate (£139.58) for the remaining 33 weeks of the period
- Expansion of paternity leave, adoption leave and shared parental leave to cover fostering to adopt: from 5 April 2015, fostering to adopt placements will give rise to an entitlement to take adoption leave, paternity leave or shared parental leave
- Expansion of shared parental leave to cover adoption from abroad: from 5 April 2015, the scope of the shared parental leave and shared parental pay regime will be extended similarly to cover adoption from overseas
- Expansion of paternity leave, adoption leave and shared parental leave to cover surrogacy (’parental order parents’): rights to paternity leave, adoption leave and shared parental leave will be available to ‘parental order parents’ of children whose expected week of birth begins on or after 5 April 2015
- Consequential renaming of ordinary paternity leave and ordinary statutory paternity pay: as a knock-on consequence of the abolition of additional paternity leave and additional statutory paternity pay:
- ‘ordinary paternity leave’ will become known simply as ‘paternity leave’, and
- ‘ordinary statutory paternity pay’ will become known simply as ’statutory paternity pay’
- New restrictions on the right to take paternity leave and adoption leave:
- consequential restrictions are placed on the right to take paternity leave and (in one case) adoption leave as a result of the introduction of shared parental leave, the right to time off to attend pre-placement adoption appointments and the broadening of paternity leave and adoption leave entitlement to include fostering to adopt arrangements
- an employee is prevented from taking paternity leave in relation to an adoption if he has already exercised a right to take paid time off to attend a pre-placement adoption appointment
- an employee is prevented from taking paternity leave in relation to an adoption if he has already taken paternity leave in relation to that same child as a result of the child being placed with a prospected adopter who was at that time the employee’s spouse, civil partner or partner
- an employee is prevented from taking ordinary adoption leave in relation to a child if he or she has already taken ordinary adoption leave as a result of that child being placed with him or her under fostering to adopt arrangements
Consolidation of the National Minimum Wage Regulations
Multiple regulations concerning national minimum wage requirements have been consolidated into a single instrument to make the rules clearer for employers and employees. The draft Regulations make no substantive changes and are due to come into force on 6 April 2015.
The National Minimum Wage Regulations 1999, SI 1999/584, which set out the detailed NMW rules, came into force on 1 April 1999 and have since been amended more than 20 times. The government has consolidated the Regulations to make them easier to understand and with a more logical order.
The regulations remake by consolidating the amendments made to them. They do not contain any substantive rule changes. Modifications of particular note include:
- the making of gender-neutral provisions, and
- changes to the structure of rules—such as shorter and more focused provisions making it easier for the reader to navigate
The national minimum wage (NMW) will increase by 3% to a new rate of £6.70 per hour, effective from October 2015. The NMW for apprentices will increase by 57p an hour to £3.30, and the rate for 16 to 17-year-olds will be £3.87 an hour from October 2015. The government will also launch a consultation with businesses on the future of the NMW rate for apprentices.
Immigration rule changes
A Statement of Changes in Immigration Rules, HC 1025, has been published which includes significant changes to the existing rules with effect from 6 April 2015. For example, the Tier 1 (General) category will be closed for applications with the exception of applications for indefinite leave to remain (para 245C). Sections relating to further leave to remain will be deleted.
For those making an initial application to enter the Tier 1 (Entrepreneur) category, it will be mandatory to provide a business plan with the application. The business plan must set out what the proposed business activities in the UK are and explain how the applicant expects to make the business succeed (paras 245DB(g) and 245DD(i)). The Explanatory Memorandum states that the change is being made to assist the Home Office, as business plans were often being requested by caseworkers in order to assess an applicant’s genuine intention to set up a business in the UK.
From 6 April 2015, the definition of ‘worker’ also includes individuals who are provided with work experience provided pursuant to a specific course of education or training approved by, or under arrangements with, the Nursing and Midwifery Council.
Student nurses and student midwives who undertake work experience as part of a course of education or training approved by, or under arrangements with, the Nursing and Midwifery Council, now fall within the extended definition of a worker who may make a protected disclosure.
A student nurse or student midwife who makes a protected disclosure concerning their work experience may bring a claim against the person providing the work experience. Any claim brought will be determined in an employment tribunal.
Tax exemption for zero emission company cars
Cars which are wholly electrically propelled and, from 5 April 2010 onwards, all zero emission cars (ITEPA 2003, s 140) are subject to a five-year complete exemption from the taxable benefit charge, which ends 5 April 2015. As from 6 April 2015 it will revert to 9%.
Abolition of employer NICs for under 21s
From 6 April 2015, under amendments made by s 9 of the National Insurance Contributions Act 2014, employers will no longer have to pay secondary Class 1 NICs on earnings up to the Upper Secondary Threshold for employees under 21 years of age.
Income tax changes
From 6 April 2015, various employment related changes relating to income tax will be made to include increasing the basic rate of personal tax allowance for 2015/16 to £10,600. An overview of the provisions of the Finance Bill 2015 has been published by the government.
Pensions: changes to qualifying earnings figures
From 6 April 2015 the figures for the lower and upper earnings boundaries will be increased to £5,824 and £42,385 respectively for the 2015/16 tax year.
The automatic enrolment and re-enrolment earnings trigger for the 2015/16 tax year is also set out and will remain at £10,000.
Lexis Nexis, 3 April 2015