Organisations that meet with the qualifying criteria can now receive Office 365 Nonprofit as a donation or upgrade to advanced features at a significant discount. This means that those not-for-profits that qualify can now benefit from the full Office 365 feature set for free or very low cost. PointSolutions have worked with many organisations to help them achieve their HR management system needs, through a SharePoint (a key part of the Office 365 mix) based HRMS.

In this month’s blog we’re looking at the main concerns facing HR in the not-for-profit / Public Sector during 2017. Firstly, here’s a round-up of key upcoming employment law changes that are either specific, or particularly relevant, to this sector:

Public Sector Exit Payment Regulations

On 1st April 2017 a new cap of £95,000 on public sector exit payments will be introduced under the Public Sector Exit Payment Regulations.  As well as this, the government has also introduced a public sector exit payment framework that limits exit payments as follows:

  • A maximum of 3 weeks’ pay for each year of service;
  • A maximum of 15 months’ salary;
  • £80,000 as the highest salary that exit payments can be based on;
  • Tapering of lump sums as employees approach retirement;
  • Action to limit or end employer-funded early access to pension as an exit term.

Repayment of Public Sector Exit Payments Regulations

These regulations were expected to come into force in 2016, but it seems that they will now come into effect during the first half of 2017.  Under the regulations, if a public sector employee earning £80,000 or more leaves their employment with an exit payment, but then later returns to a role within any part of the public sector within 12 months of their termination date, the exit payment will be recovered.

It was expected that these regulations would come into force in 2016, but it’s now the government’s intention that they will be introduced in early 2017, although the exact date is yet to be confirmed.

Off-payroll Legislation

This legislation is being put in place to stop workers from avoiding tax.  It affects individuals who work for a public sector organisation through their own personal services company (PSC), but who, if it wasn’t for the PSC, under IR35 rules, would be employed by the public sector organisation.

From 6th April 2017 the public sector organisation (or the agency that supplies the individual to the public sector organisation) will have to deduct employment taxes and NICs from payments made to the PSC, as if they were employment earnings.

Public sector organisations will have to identify and review the employment status of all workers working through PSCs, including those that come through an agency. The legislation will significantly add to the workload of public sector HR departments.  It’s also likely to lead to employment rights claims from individuals who are newly subject to PAYE.

Gender Pay Gap Reporting Regulations

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 are due to come into play from 6th April 2017.  They outline how private sector organisations that employ more than 250 people should calculate and report on the gender pay gap. The Gender Pay Gap is the difference between women’s and men’s average, weekly, full-time equivalent earnings, expressed as a percentage of men’s earnings. The deadline for organisations to publish their first report (which will be based on pay and bonus data from 2016/17) is expected to be 5th April 2018.

Although these regulations don’t apply to public sector organisations, separate regulations that will place the same requirements on them are going to be published soon. They are also likely to take effect on 6th April 2017.

Apprenticeship Levy

The Apprenticeship Levy (scheduled to come into effect in April 2017) is a payment of 0.5% towards the cost of apprenticeship training that will be collected from all UK public and private sector employers with a payroll of more than £3 million per year. The payment will be paid to the HMRC through PAYE returns.

The aim of the Apprenticeship Levy is to encourage employers to invest in apprenticeship programmes and to raise additional funds to improve the quality and quantity of apprenticeships.  The same organisations can then use the levy to support their own apprenticeship training.

Wider Challenges

As for the wider challenges affecting public sector HR, what are these?  Well, in short, the need to do more with less – coping with ever-growing pressure caused by an increased demand for services not being matched by increased funding.  This is then exacerbated by the already existing skills shortages in many public-sector occupations.

To take things from bad-to-worse, there is now the added pressure of the implications of Brexit.  Although the impact of Brexit on the labour market is still relatively unknown, the public sector is expected to be severely impacted by the risk of a drop in EU labour, with 43% of education and 49% of healthcare sector employers surveyed in the Labour Market Outlook saying they believed EU migrants among their workforce were considering leaving (The Guardian, 2017).

Unfortunately, we don’t have the answers to all of these challenges; we wish we did, but, looking at skills shortages, younger generations may just hold the answer.

Public sector organisations must capitalise on their strengths.  Amongst other things these are that:

  • They more readily offer flexible working than the private sector;
  • Working with the public sector means doing good and giving something back;
  • There is usually more job security within the public sector compared with the private sector;
  • Although the demands of working within the public sector can be high (not only because of the need to do less with more), there isn’t the cut-throat competitive culture that there often is within the private sector;
  • According to (2017), public sector employees work nine years less and earn 30% more than private sector employees throughout their lifetime;
  • Again according to (2017), benefits in the public sector are 14% higher than comparable private sector benefits on average.

Looking to the future, one possible solution may lie in the wants and aspirations of Generation Y (teenagers and young adults).

Generation Y wants to work to live, rather than to live to work.  They’ve grown up with their parents working all hours, constantly clawing for increased money and status and they want more than this.  Their focus is less on a six-figure salary and more on corporate social responsibility and the ability to have a better work-life balance through flexible working.  Surely public sector organisations must now use this to their advantage by offering more apprenticeship schemes and other ways of attracting young people to work for them?  Well, we’ll leave that to the strategists.