Employment law is constantly evolving and it is therefore important for employers to keep up to date on developments.
The primary focus on the majority of business’ minds at the moment is business continuity. On 20 March 2020 the Government announced a scheme to provide all businesses with wages for employees who are “furloughed”. HM Revenue and Customs will reimburse 80% of workers wage costs, up to a cap of £2,500 per month. We are waiting for further information on the mechanics of this.
With so much uncertainty caused by the impact of COVID-19, it is easy to lose sight of the day job. To help you with this we have set out below an easy guide to the latest employment law changes due to be introduced in April 2020.
Parental Bereavement Leave and Pay - On 6 April 2020, the Parental Bereavement (Leave and Pay) Act 2018 will come into force, which gives employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, on or after 6 April 2020, the right to two weeks paid leave. The two weeks leave can be taken together, or as two non-consecutive weeks, at any time during the 56 week period following the child’s death. If the bereaved parents has been in continuous employment for a period of 26 weeks with their employer, they will be entitled to this paid leave at the same statutory rate as other rights, such as maternity/paternity leave.
National Minimum Wage - As of 6 April 2020, the government has pledged to resume the public naming and shaming of businesses that fail to comply with the National Minimum Wage regulations. This will apply to companies with more than £500 in payment arrears, which has been raised from a threshold of £100 (but fines will still be enforced for all companies with payment arrears, regardless of the amount outstanding).
Agency Workers and the Swedish Derogation - The Agency Workers (Amendment) Regulations 2019 comes into force on 6 April 2020, which will close a legal loophole (known as the Swedish Derogation) which allowed agencies to opt out of equalising the pay of agency staff and their permanent workforce when they had been with the same employer for more than 12 weeks, as long as they paid the agency workers between assignments.
Reference Period for Average Week’s Pay - Under the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, from 6 April 2020, the government is lengthening the reference period for determining an average week’s pay from 12 weeks to 52 weeks. The reform is designed to improve the holiday pay for seasonal workers who are often adversely impacted by the current method of calculation.
Termination Payments - As of 6 April 2020, employers will be liable to pay class 1A national insurance contributions on all termination payments above a £30,000 threshold. This measure aligns the rules for tax and secondary national insurance contributions. It is expected that the tax will be collected in ‘real-time’ as part of the employer’s standard weekly or monthly payroll returns and remittances to HMRC.
Information and Consultation Changes - The ICE Regulations 2004 gave employees of businesses with 50 or more employees in the UK the right to requested that their employer set up or change arrangements to inform and consult them about issues in the organisation, as long as at least 15 employees made the request. As of 6 April 2020, the threshold for making such a will drop from 10% of the workforce to 2% (as long as 15 employees are still making the request).
Statement of Written Particulars for Workers - Under the Employment Rights (Miscellaneous Amendments) Regulations 2019, from 6 April 2020, the entitlement to receive a statement of written particulars setting out the terms and conditions of employment will be extended to include workers as well as employees, as a day one right. This will replace the current system whereby employers have up to two months to issue the statement to any employee working for them for more than one month. There is also additional information that should not be included in the written particulars.
In light of COVID-19, the following April changes have been postponed:
Rollout of IR35 for Private Sector Postponed - On 17 March 2020 the government announced that, in light of the coronavirus outbreak, the rollout of the new off payroll working rules (IR35) to the private sector would be postponed for one year until 6 April 2021.
IR35 was designed to allow HMRC to collect additional tax payments from contractors who are employees in all but name. If the contractor is operating through an intermediary, such as a limited company, and but for that intermediary they would be an employee of their client, then IR35 would apply. IR35 would prevent such contractors from paying less tax and national insurance contributions than those permanently employed by the client company. From 6 April 2021, IR35 will apply to all private sector employers that in a tax year have more than 50 employees; an annual turnover over of £10.2 million; and a balance sheet worth over £5.1 million.
Gender Pay Gap Reports Postponed – On 24 March, the Government Equalities Office and the Equality and Human Rights Commission took the decision to suspend enforcement of the gender pay gap deadlines for this reporting year (2019/20).
On 4 April 2020, private, voluntary and larger public sector employers in England, Wales and Scotland with at least 250 employees would have been required to publish statutory calculations demonstrating the differences in pay and bonuses between men and women in their workforce. This would have been the third year that such reports have been required under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.
If you require any advice in relation to the above, please feel free to contact Michelle or Philip at DAC Beachcroft.
DAC Beachcroft are a market leading law firm operating from eleven locations across the UK, providing one of the most comprehensive UK legal networks. For more information or advice, please contact one of DAC Beachcroft’s experts in our Employment and Pensionsteam. The material and content of this blog has been prepared for information only, and does not constitute advice. DAC Beachcroft and/or Atkinson HR Consulting accept no responsibility or liability for any loss or damage caused to you or any third party as a result of any reference or use by you of this information. For further detail and/or employment advice, please contact DAC Beachcroft directly.