If you have children or grandchildren and see them easily navigating their way across multiple digital devices – whether laptops, smartphones, tablets, PCs, smart televisions or game consoles – it's unlikely to come as a surprise to you to learn that just about every single facet of human life is in the process of being disrupted by technology. And, yes, this includes all areas surrounding those twin certainties: death and taxes.
In fact, so inevitable is this disruption that we should no longer even be asking the question of whether it is going to make things better or worse. Instead, we should be looking to ask, since continued disruption is inevitable, how are we going to ensure that other inevitable, such as probate administration, are made better?
This year is already set to be a busy one for employment law and HR practitioners with a list of forthcoming legislation changes in the pipeline. Here's a brief guide for business owners on some of the key changes for 2017.
National Living Wage
This is a forthcoming change that has been relatively well publicised. The government announced in its November 2016 autumn statement that the National Living Wage (NLW), currently set at £7.20 for workers aged 25 and over, will increase to £7.50 from April 2017. The changes to the National Minimum Wage (NMW) for workers under the age of 25 may require closer attention year on year due to the rates being highly staggered. The rate for 21 to 24 year old workers will rise to £7.05 an hour, the rate for 18 to 20 year olds will increase to £5.60 an hour, and the rate for 16 and 17 year olds will go up to £4.05 an hour. The minimum hourly rate for apprentices will be set at £3.50 an hour.
Apprenticeship Levy
From 6 April 2017, businesses with annual PAYE bills of more than £3 million will be required to pay a levy equivalent to %0.5 of their total annaul salaries to help fund additional apprenticeships over the next five years. Each UK employer paying the levy will receive an allowance of £15,000 to offset against their costs for apprenticeship levvies.
All organisations meeting the salary threshold will be required to contribute, regardless of whether they have apprentices, but those that have apprentices will be able to put the amount owed in a digital apprenticeship service account and, potentially, recover some of it for use in approved apprentice training programmes. Employers will receive a government top-up of 10p for every £1 put into the apprenticeship account.
Gender Pay Gap Reporting
Any gender pay gaps is to become compulsory to report for private sector and voluntary organisations employing 250 or more people under the Small Business, Enterprise and Employment Act 2015. The rules will also be rolled out to large employers (250 employees or more) in the public sector bodies in England but not Scotland and Wales.
The final version of the private sector gender gap information regulations has now been published and is due to come into force on 6 April 2017. Employers in scope will need to publish their first report by 4 April 2018, based on a ‘snapshot’ date of their pay gap on 5 April 2017.
Employers have to analyse and report on the percentage difference between male and female employees, as well as the percentage of men and women who received a bonus in the previous year, and the percentage of men and women in each hourly pay rate quartile.
The Equality and Human Rights Commission can take enforcement proceedings against employers failing to comply with the regulations, and any inaccuracies could lead to adverse inferences being taken against an employer in any subsequent discrimination tribunal claim.
Tribunal Enforcement Penalties
Under the Small Business, Enterprise and Employment Act 2015, which came into force on 6 April 2016, the government can impose a financial penalty on employers that fail to pay compensation awarded by tribunals or sums agreed under an Acas settlement agreement. This would be payable to the state, rather than the claimants. The fine will be 50% of the outstanding award, subject to a cap of £5,000.
The Department for Business, Energy and Industrial Strategy, has produced an employment tribunal penalty form to be used by claimants who have not received a tribunal award or an Acas conciliated payment. Claims for non-receipt can be made 42 days after the tribunal judgment, or following non-payment on the agreed date in a settlement agreement.
Tax on Termination Payments
From April 2018, all payments in lieu of notice (PILONs) will be subject to tax and national insurance contributions (NICs), regardless of whether there is a contractual right to make the payment or not.
The tax exemption for payments up to £30,000 made in connection with termination of employment, such as redundancy, will remain in place, but payments above that amount will be subject to both income tax and employer NICs.
There is a distinct feeling, shared among many divorce lawyers, lawmakers, religious organisations and indeed general members of the public, that the introduction of "digital divorce" would somehow trivialise the vows and institution of marriage.
It is easy to understand this point of view, to believe that to make divorce cheaper, more accessible and, ultimately, more attainable would only serve to undermine one of society's most traditional and sanctified of contracts. In short, they suggest, it would represent little more than another lurch down the slippery slope to eventual social Armageddon.
We are in a midst of a technological sea change that may well not have any kind of ceiling on it, but to imagine that the legal sector is any different from most other industries – whether media, finance, retail or any other – would be very myopic. Yes, like it or not, technology is disrupting the old paradigms and is here to stay.
Whether you use an Oyster card to commute to work, have replaced your Compact Disc collection with Spotify playlists, shop at Ocado or share your family photos with grandparents on Facebook, the chances are that you are more embedded in the age of digital technology than you might first assume.
Read more: Breach of contract claims to be disrupted by legal tech
In the admirable hit Netflix series “Stranger Things”, the principle conceit which gripped the viewers and help make it the most watched Netflix series ever was the terrifying creature lurking in the shadows.
In today’s high velocity business world, we are increasingly used to working in fully magnified open view. The temptation is to look for ways in which we can retreat back into the shadows. But particularly for those of us who have relatives, friends, or business associates who are company directors, or for professional advisors of companies or their directors, there can be significant jeopardy lurking in the shadows.
Anyone involved informally in the activities of a company may be surprised to learn that, despite not being officially appointed as a director, duties and personal responsibilities and liabilities similar to that of a director may arise. In particular the risks are:
Under the Companies Act 2006, a shadow director is defined as a person in accordance with whose directions or instructions the directors of a company are accustomed to act. It is not an offence to be a shadow director but it does give rise to a number of onerous responsibilities and duties and can lead to those individuals unwittingly adopting significant personal liability. Shadow directors commonly owe fiduciary duties, and can reasonably be expected to assume responsibility for the company’s dealings and act in the company’s interests (rather than their own), when giving directions and instructions. Importantly, a shadow director can be liable for wrongful or fraudulent trading and is also subject to the threat of director disqualification. Typically you won’t be covered by the company’s directors and officers liability insurance (if any).
The clients I talk to often have the common misconception that they can only be a “shadow director” if they are the puppet master of the company, controlling a board from the sidelines. In fact, it is unnecessary for a shadow director to have any form of control. Instead the key factor is the influence that person has over the directors, namely to what extent the board is accustomed to acting in accordance with the person’s instructions.
Experienced business people and entrepreneurs are increasingly encouraged to see themselves as Dragons Den type advisors, providing informal advice to company boards, directors, family members and friends. Given their hard earned reputation for astute commercial acumen, such advice is more often likely to be followed leaving them most at risk.
Members of senior management, who are not directors, may have trusted views about the decisions which the company makes or may be the only person with expertise in a certain area (such as accountancy). Family members and friends, particularly if they are shareholders, may also routinely offer advice or have influence over the decisions which the directors take.
Although there are some additional safeguards for professional advisors, (particularly where retainers are in place) where a professional goes beyond that retainer as a trusted business advisor they may also find themselves at risk.
So what are the 6 things should anyone concerned about that their involvement with a company do now to protect their position?
As the residents of Hawkins, Indiana found out, the creature lurking in the shadows can provide a terrifying and unwelcome surprise.
