The Employment Law Changes Your Business Needs To Prepare For
Employment law changes. They usually happen twice a year in April and October. This means that as HR professionals or business owners, you need to be one step ahead of these changes to ensure you comply with your legal responsibilities.
This October there doesn’t appear to be any imminent changes to employment law legislation, however we did have quite a few substantial changes in April; these were the:
Increase in National Minimum Wage Gender pay gap reporting deadline Changes to employee payslips Increase in statutory maternity, paternity, adoption and shared parental pay Changes to statutory redundancy pay calculations
If you are unsure of whether you and your company are currently complying with the April 2019 changes, you can talk to our team on 08450 50 40 60 or can
email them here. As there are no changes this October it usually means we are to expect a lot of changes in 2020. And that is certainly true. Although 2020 is 3 months away, it pays to be prepared and become knowledgeable on the legislation that is going to affect you, your business and your employees. Contracts of employment need to be issued from day 1
From April 6
th, employees will be legally entitled to a contract of employment upon day 1 of their commencement of employment. Currently, employers have 8 weeks after the first day of employment to provide their employee a contract of employee. This change will be a benefit to both employers and employees as contracts of employment are what confirm and form the basis of your working relationship.
They also set out the ground rules of your business such as payday dates, dress codes and any other company policies. All need to be discussed and agreed to as soon as possible for your new employee to fully understand and respect your business.
Holiday pay changes for variable workers
The reference period that is used to calculate a variable hours employee’s holiday is changing from April 6
th. At the moment, the reference period is 12 weeks however we are going to see it significantly jump to 52 weeks. It’s worth noting that if your employee has been employed for less than 52 weeks then their number of weeks employment is their pay period.
The reason for this change is to reflect the seasonal nature of casual and zero hours work so that employees can make the most of their full holiday pay entitlement.
To prepare for this change, employers will need to ensures records of hours worked and amount paid are retained back until you hit the 52 week mark. The abolishment of ‘Swedish Derogation’
Swedish Derogation is a legal loophole many companies use in order to avoid paying their agency staff the same as their permanent staff. From April 6
th, if your agency staff have worked with you for more than 12 weeks (and have been paid between assignments) then they will be entitled to rights relating to their pay. This means that agency staff will be entitled to the same wage as permanent workers who are carrying out the same job role. This abolishment creates a fairer working environment for employees, however for employers it means your monthly payroll is likely to increase. Tax increase on termination payments
Termination payments are a sum of money paid to an employee on their termination of employment. They’re often used in settlement agreements and are currently tax free. However, that is soon to change. From April 6
th, any termination payment in excess of £30,000 will be subject to an employer’s National Insurance Contribution (NIC) as well as income tax. This means that there will be an additional cost to employers when it comes to termination payments above the threshold. For employees, it could mean that termination payments are decreased in order for employers to avoid the NIC tax. IR35 tax changes
th sees changes to off payroll working (IR35) rules. Currently, it is up to the actual IR35 company to self-assess their IR35 status as well as NIC contributions. However not surprisingly, this has led to companies manipulating the system to avoid paying NIC and other premiums. From April, it is the end user who is responsible for determining whether a contractor sits inside or outside of IR35 rules. This means the IR35 private sector rules will now be consistent with the public sector. Executive pay gap reporting
Not exactly a legislation change, but the executive pay gap report will be published in 2020. The executive pay gap requires all companies with over 250 employees to report their executive pay ratios. If you’re a company with over 250 employees and haven’t yet submitted your executive pay gap report, we suggest you do so before the end of the year.
Parental Bereavement Act 2018
April will see the
Parental Bereavement Act 2018 introduced which gives employees the right to two week’s paid time off from day one of employment, however the leave will be paid at the statutory rate provided the employee has been employed for at least 26 weeks. The Act will be applicable to not only to the parents but also primary carers (adopters, foster parents, guardians, close relatives and family friends) should there be the death of a child under the age of 18.
There are certainly a lot of changes on the horizon when it comes to 2020’s employment legislation, and understandably, you may be confused as to what you should do next. Our
employment law consultants are on hand to talk you through the above changes as well as help you comply with your responsibilities as an employer.
For more information call our team on 08450 50 40 60.