HR legislation in 2018: What did the year bring?
2018 has seen many developments in the HR world in the form of new legislation for businesses to navigate and implement. Out of these legislative and cultural changes came new challenges for HR and, most importantly for us, new solutions and approaches.
Notable developments this year have included the implementation of two pieces of pioneering legislation; gender pay gap reporting and GDPR. The new gender pay gap reporting, which came in to effect in April, requires companies with over 250 employees to release their gender pay gaps publicly. This exercise proved the prevalence of gender pay gaps across a multitude of industries and many huge businesses, including Ryanair, Macquarie, and Sony, reported large pay gaps between men and women.
The results have meant that that we have tangible proof that a problem exists, so what can HR do to ensure new plans and policies bring real results? Dr Charlotte Gascoigne has pointed out that one of the main ways we can tackle pay discrepancy is to “create quality flexible jobs that allow women and men to balance ambition with caring responsibilities”. Ensuring job flexibility and designing senior roles that work for all employees, including mothers and fathers, is key – and much of this responsibility lies with HR.
By May of this year, the General Data Protection Regulation (GDPR) had also come into full force – another significant development. For HR this has meant increased importance on the way companies are handling the personal data of their customers and employees, and having an action plan in place to ensure their privacy is protected. It has been vital for HR departments to develop a strong understanding of GDPR and how it affects the workings of a business.
Meanwhile, other new legislation is facing roadblocks. April saw the anniversary of full year since the apprenticeship levy was introduced; a scheme that has faced significant backlash. A product of an increasing skills shortage, the apprenticeship levy is in principle a good idea but has faced criticism for being executed poorly. Instead of an increase in apprenticeships, the opposite has happened, with apprenticeships falling from 309,000 in August 2017, to 232,700 in February 2018.
Many businesses see the levy as an extra tax, as the maximum allowance of £27,000 doesn’t cover the cost of high level apprenticeships. As a result, almost £600 million could be wasted by 2019/2020 as businesses rebrand low skilled courses as apprenticeships in order to qualify for the subsidy. For HR, this means a focus on ensuring apprenticeships are skills based, clearly structured and are providing the necessary training to fulfil a highly skilled role.
And finally, 2018 saw an increase to the National Minimum Wage. As the minimum wage increases, so does the buffer between what businesses are paying their employees and what they are legally required to pay them. For HR, it’s vital that businesses are not only continuing to comply with the minimum wage, but are conscious that employees’ salaries are not falling below the minimum amount due to inadvertent underpayment, whether through salary sacrifice or expenses such as uniforms. Correct pay is not just a compliance matter, ensuring your employees know they are being paid fairly goes a long way in increasing trust and engagement with your workforce.
Legislation will always continue to change and shape HR, but it is up to HRDs to determine the most effective ways to enact these policies in order to harness the power of their workforce.