With employment set to continue increasing, and unemployment levels estimated to be at a record low in April 2019, many organisations were awaiting the announcement of employment initiatives in the Chancellor’s Autumn Budget.
The announcement of increased spending for mental health care services is a positive sign for employers who are becoming increasingly aware of the importance of positive management of staff with mental ill health. Following World Mental Health Day earlier this month which aims to increase awareness, employers are likely to be examining their internal practices to ensure they are best placed to provide employees with workplace support. A key part of this is making employees aware of appropriate external services and the newly announced 24-hour mental health crisis hotline will be a positive tool for employers, and employees.
The promise in business rates reduction will allow small employers to consider their financial budgets ahead of increases to National Minimum Wage and National Living Wage in April 2019. At the same time, employer minimum contributions for those members of staff auto-enrolled into workplace pensions will be increasing from 2 per cent to 3 per cent in April 2019. This makes April a costly time of year for employers, so they can use this time to plan their accounts and ensure they have adequate funds in place.
2.4 million workers will benefit from the confirmed increases to minimum wages. The new pay rates, set to take effect in April 2019, are set out below:
- National Living Wage (workers aged 25+) – from £7.83 to £8.21 an hour
- National Minimum Wage rates:
- workers aged 21-24 – from £7.38 to £7.70 an hour
- workers aged 18-20 – from £5.90 to £6.15 an hour
- workers aged 16-17 – from £4.20 to £4.35 an hour
- apprentice rate – from £3.70 to £3.90 an hour
Additionally, when considering costs and future workforces, many employers will be pleased to see that the amount they will have to pay to train apprentices will be halved. The current 10 per cent contribution that non-levy paying employers pay towards the cost of the apprenticeship, with the government paying the remaining 90 per cent, will be reduced to 5 per cent. This makes apprentice recruitment more attractive for smaller organisations, and helps them train skilled members of staff. The ability for levy-paying organisations to transfer levy funds to organisations within their supply chain will also increase from a maximum 10 per cent to 25 per cent. These changes are expected to be introduced in April 2019.
Finally, it was confirmed that IR35 rules will be extended to the private sector. Currently only applying to the public sector, these rules make employers responsible for assessing whether workers engaged through intermediaries, usually on a self-employed basis, should be taxed as if they were an employee. The private sector extension is scheduled for April 2020 and will only apply to large and medium-sized organisations.