We appreciate that with the current Coronavirus outbreak you may have forgotten the numerous legislation changes coming in to force this month, don’t worry we haven’t!
We have a summary of the main changes!
Increase in National Living Wage and National Minimum Wage
The Regulations came into force on 1 April 2020 and increases the hourly rates of national living wage (NLW) and national minimum wage (NMW) as follows:
• The NLW for workers aged 25 and over increased from £8.21 to £8.72 per hour.
• The NMW for 21 to 24-year-olds increased from £7.70 to £8.20 per hour.
• The NMW for 18 to 20-year-olds increased from £6.15 to £6.45 per hour.
• The NMW for 16 to 17-year-olds increased from £4.35 to £4.55 per hour.
• The apprentice rate for those under the age of 19, or in the first year of an apprenticeship, increased from £3.90 to £4.15 per hour.
• From 1 April 2020, the accommodation offset increased from £7.55 to £8.20 each day.
• The National Minimum Wage (Amendment) (No 2) Regulations 2020, came into force on 6 April 2020 relating to salaried hours work. Changes include: “salary premiums” such as London weighting, unsociable hours or bank holidays will not be included when calculating minimum wage.
• The ability to change the calculation year for salaried workers provided that written notice is given by employers.
There is also a change introducing a requirement that an employer make, or intend to make, a separate payment to cover goods and services that a worker is obliged to purchase from the employer in order to avoid it being a reduction to basic pay. This takes effect for the first pay reference period after 6th April 2020.
Written Statement of terms
Under the Employment Rights (Miscellaneous Amendments) Regulations 2019 from 6 April 2020, all employees and workers will be given the right to a written statement of terms from day 1 .
Our recommendations
- Have your contract of employment reviewed to ensure that it includes the required detail. It could be that you are subjected to costly claims. Speak to us about reviewing your contract!
- Review your recruitment procedure to ensure that documentation is issued on or before day one. Speak to our HR Specialists on how we can help you develop an effective recruitment process.
Taxation of termination payments
The government have now clarified the tax and NICs treatment of termination payments from 6 April 2020:
• Treat all PILONs as earnings (subject to tax and class 1 NICs)
• All termination payments above £30k threshold are subject to class 1A NICs (employer liability only)
• HM Treasury are permitted to vary the £30k threshold
Our recommendation
- Always seek advice from an employment lawyer and do not use previous settlement agreements you have used for other people as it is likely that certain clauses will be missed.
Parental Bereavement Leave and Pay Regulations – “Jacks Law”
From 6 April 2020, all employees who lose a child under the age of 18 or suffer a stillbirth after 24 weeks of pregnancy will be entitled to 2 weeks’ statutory leave to be taken in one block or as two separate blocks of a week.
Employees with at least 26 weeks’ service, who meet minimum earnings criteria will also qualify for Statutory Parental Bereavement Pay (at the same rate as Statutory Paternity Pay).
Employees have up to 56 weeks from the date of the death (or stillbirth) to use up their leave entitlement.
Our recommendations
- Consider having a Parental Bereavement Policy in place so if the time comes where this is applicable you are able to manage the situation with confidence and sensitivity. We can draft a policy tailored to you and your approach to this situation.
- Understand that grief affects each person differently and this could affect a person’s physical and mental wellbeing.
Holiday Pay
• New holiday pay reference period
o The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 came into force on 6 April 2020, which amend the Working Time Regulations increasing the reference period for determining an employee/workers average pay (for the purpose of calculating holiday pay) from 12 weeks to 52 weeks OR the number of completed weeks for which they have been employed.
Our recommendation
- Ensure that pay records for the 52 weeks prior to 6 April 2020 are accurate and up to date. How do you record your data?
The abolition of “Swedish Derogation”
No later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that with effect from 6 April 2020, those provisions no longer apply.
Our recommendation
- Ensure your agency workers have been provided with the appropriate information.
Key Information Document
o From 6 April 2020 agency workers must be given a key information document before agreeing terms with an employment business.
o It is intended to improve transparency particularly around pay.
Our recommendation
- Ensure that you have a robust and carefully drafted key information document in place.
Off Payroll Working Rules (IR35) in the Private Sector
The IR35 tax rules are aimed at making sure that where a contractor who provides their services through an intermediary (often their own limited company) would be considered to be an employee if that intermediary were not used, that contractor is subject to broadly the same tax and National Insurance contributions as employees.
This came into force on the 6 April 2020 however, due to the Coronavirus outbreak the government have extended implementation to April 2021.
Our recommendations
- Although there has been an extension, it is strongly advised that businesses affected should have their current workforce audited to identify those it would apply to.
- Provide training in IR35 to ensure that there is a clear understanding on all parties of their obligations.
- Make sure all your contractual documentation is updated.
Government Consultations
Currently there are further government consultations underway that are reviewing the following;
• Increasing parental rights
o Parental leave and neonatal pay.
o Redundancy protection for new parents and expectant mothers.
• Confidentiality clauses; measures to prevent misuse in situations of workplace harassment or discrimination.
• Proposed further protection for employees under the Good Work Plan
o proposals to reduce ill health-related job loss.
o Creation of a single employment enforcement body for employment rights.
o addressing unfair flexible working practices.
