mfg Blog

News and Events

Looking ahead to 2017 and how changes in employment law affect your business in 2017

  • Posted

Significant employment law changes are anticipated in 2017.

Businesses will still be tackling issues such as who are workers or self-employed, how holiday pay should be calculated, and how to grapple with the ongoing uncertainty from Brexit.

Gender pay gap reporting will dominate the HR agenda 2017, as will the introduction of the apprenticeship levy and the reduction in tax savings for employee benefits. This is likely to increase staffing costs for businesses, which coupled with the increased penalties for breaches, means it is vital employers ensure they are familiar with the new requirements and ensure they have systems in place to make sure they remain complaint.


The most significant event anticipated for 2017 is Article 50, which is scheduled to be triggered at the end of March 2017. However with the current Supreme Court challenge, and potentially other court cases, it is unclear whether this timetable will remain in place.

It is still uncertain what will happen to UK employment legislation derived from the EU. The biggest issue is likely to be what will happen to the free movement of labour, with most employers keen to see how this develops.

Gender pay gap

Probably the most significant employment development in the short-term is the gender pay gap reporting regulations.

Businesses with 250 or more members of staff will be required to publish gender pay gap information for the first time. Employers will be obliged to release information relating to employee pay and bonus pay, as well as information on the number of men and women in each quartile of the organisation’s pay distribution.

Apprenticeship levy

Employers with an annual payroll of more than £3 million will be required to pay a 0.5% levy on their total pay bill starting on 6th April 2017.

Large employers will be able to access levied amounts, plus a government top-up of 10% to fund apprenticeships from accredited training providers.

Smaller organisations that are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10% towards the cost of an apprenticeship, with the Government paying the remaining cost.

Salary-sacrifice schemes

Employers will need to reconsider their salary sacrifice schemes as many of the tax saving benefits in these schemes will be abolished from 6th April 2017. Pension savings, childcare, cycle-to-work and ultra-low emission cars will not be affected.

Minimum and Living Wage

The cycles for reviewing the rates for the National Minimum Wage and National Living Wage will be aligned from 1st April 2017.

From 1st April 2017, the rates will be as follows:

  • £7.50 per hour for people 25 years old and over
  • £7.05 per hour for people aged 21-24
  • £5.60 per hour for people aged 18-20
  • £4.05 per hour for people aged 16-17
  • £3.50 for apprentices aged under 19 or apprentices aged over 19 who are in the first year or their apprenticeship.


In families where both parents work and each parent earns less than £100,000 per year, and a minimum weekly income at least equivalent to 16 hours at the rate of the National Minimum Wage, the Government will pay 20% of their yearly childcare costs (capped at £2,000 for each child). The scheme will apply to parents with children aged under 12, and will be introduced in early 2017.

From September 2017, working families will be entitled to 30 hours’ free childcare for 3 and 4 year olds.

Taxation of termination payments

In the longer term we are going to see changes to the taxation of termination payments, anticipated to be the end of 2017 or early 2018. The changes will mean that all payments in lieu of notice, whether contractual or not, will be taxable.

The gig economy

The rise of Uber and Deliveroo highlight the rise of the gig economy is becoming a significant issue, as the treatment of these workers are attracting more attention from the media. We therefore expect the Government to take some form of action to review the current situation.

With employment law changing regularly, we understand it can be difficult for businesses to keep abreast of the latest employment law legislation, and more importantly, the implications of these changes for your business.

Solicitors from the Employment Team at MFG Solicitors have already received numerous queries from clients about the impact of these changes, and will be delivering seminars throughout 2017. For more details about these seminars, or for any further information about these changes, please let in touch with Sally Morris at or on 01905 734032.