By Dipa Mistry Kandola, Head of Flexible Benefits, LCP
In this blog, Dipa Mistry Kandola shares her must-read tips to help you successfully adjust to the new regulations that will be impacting HR departments across the UK imminently.
And with just over 6 months to go, how you can take this opportunity to revisit your strategy setting and implementation.
With yet more changes coming HR’s way before next April, employers need to ensure they are looking at big, regulation driven areas now…
1. Update your benefits and salary sacrifice arrangements
The income tax and National Insurance Contributions advantages of most benefits in kind provided through salary sacrifice (or other optional remuneration) arrangements are being phased out from 6 April 2017. Now that the details have emerged in the Finance Act employers should start reviewing their current benefit arrangements.
As part of renewal planning specifically for flexible benefit schemes and insured benefits, now’s the time for employers to ensure:
- Additional budget is set aside to account for the Insurance Premium Tax increase which applies from June 2017 and increased employers’ and employees’ National Insurance which were previously available for some benefits;
- Benefits are set up correctly within the various systems (eg payroll and any flexible benefits platform) in time for when the changes take effect from; and
- Once your organisation has decided how to manage these changes that they can be communicated to employees now and/or as part of any communication that happens on an annual basis (ie when the flexible benefit scheme election window is opened).
2. Review your auto-enrolment arrangements
From next April (2018), we will see auto-enrolment minimum employer contributions rise for the first time since its introduction.
The impact will depend on your population of eligible workers and whether your organisation chose to pay the minimum level of contributions when you hit your staging date. However here are some key considerations:
- How will a 1% increase on pension’s contributions affect benefit budgets?
- Will we have to cut back on other benefits?
- How many employees will this affect?
- How will we communicate these changes to employees to minimise opt out rates?
Early planning will help to answer these questions with enough time to implement any changes and minimise the disruption to the business and the employees.
3. Get ready for General Data Protection Regulation
The General Data Protection Regulation (GDPR) will apply from 25 May next year (2018), and introduces a much tougher regime compared with the existing data protection legislation. While this is not exclusively an issue for HR, there is a major role to play in ensuring compliance within your organisation.
Many of the benefits you offer employees are provided by third-party providers who hold significant amounts of employee data. These include insurers, payroll, HR, benefit and/or pension platform service providers.
With just under a year to go it is crucial to ensure that their processes and privacy policies that are viewed by the end users (ie your employees) are compliant with your organisation’s expectations, and that any necessary adjustments are made ahead of May 2018.
If you haven’t already, start speaking to other departments (finance, marketing and legal) in your organisation now, and get a project team in place with clearly defined roles and responsibilities.