The Apprenticeship levy – how am I affected?

As you may have expected, the Government’s initiative to introduce three million new Apprenticeships by 2020 has created a funding dilemma – the solution being that the shortfall will essentially be funded by employers in England who have an annual pay bill of over £3m.

The levy came into force on 6 April 2017 and is set at 0.5% of an employer’s total wage bill. It is paid via PAYE monthly and in return, each employer receives an annual allowance of £15,000 to spend on approved apprenticeship training programmes – this allowance is also applied monthly and any funds not used by employers can be carried forward.

Employers are able to access a ‘digital apprenticeship service’, an online system where they can manage how much they are spending, and recruit apprentices through various training providers.

Many employers have argued that they should be permitted to decide how their own training budgets are allocated, whilst others are concerned that the initiative has placed more emphasis on the quantity rather than quality of training provided.

Key employment law changes

As you may or may not be aware, each year in April the Government introduces new legislation in respect of employment rights and responsibilities.  Below is a summary of the key changes being implemented this month.

National Living Wage

From 1st April 2016, workers aged 25 and over are entitled to the ‘national living wage’ rate of £7.20 per hour – this is essentially a new ‘top rate’ of the national minimum wage.


– The new rate is applicable from the first pay reference period commencing on or after 1st April 2016.

– Please ensure you check that employees’ pay is not brought below the new rate by any form of salary-sacrifice scheme.

Penalties for non-payment of the national minimum wage doubled

This has also taken effect from 1st April 2016 and the same enforcement provisions apply for failure to pay the national living wage.  Further details can be found here:

Employer NICs and Apprentices

You may have noticed the Government’s recent campaign to entice employers to provide more apprenticeships – in their latest drive they have decided to abolish National Insurance Contributions for apprentices aged under 25.  These changes have been introduced with effect from 6th April 2016 and it is hoped they will incentivise employers to offer more apprenticeships going forwards.

Statutory family-related pay and sick pay

Employers will be surprised to note that there will be no increase to statutory adoption, maternity, paternity or shared parental pay rates this year, and statutory sick pay is similarly unchanged.  Details of the current applicable rates can be found here:

However new limits for statutory redundancy pay and employment tribunal awards have been introduced from 6th April 2016, and are as follows: