Employment law is always on the move. Here's our summary of the 10 key upcoming changes for HR to be aware of:
1. Coronavirus – temporary changes to Statutory Sick Pay (SSP)
The government has announced that it will temporarily amend the eligibility requirements for SSP, allowing SSP to be paid from the first day of sickness absence and making it available to those advised to self-isolate and those caring for others within the same household who have symptoms and are advised to self-isolate.
The government has also announced that the cost of providing SSP to any employee off work due to coronavirus will be refunded by the government for up to 14 days for businesses with fewer than 250 employees.
The government and Acas have published guidance for employers and businesses on how to deal with issues in the workplace surrounding coronavirus and employers should follow this advice.
2. IR35 reform – new rules now coming into force in April 2021
The government has announced that it is postponing the reforms to the IR35 tax rules which were due to come into force on 6 April 2020 for a year. This is in an attempt to alleviate pressure on businesses and individuals as a result of the Coronavirus pandemic. They will now take effect on 6 April 2021.
The reforms are designed to tackle perceived non-compliance with existing off-payroll working rules by shifting the responsibility for determining the tax status of contractors to medium and large organisations in the private sector who are using their services.
Businesses and contractors will welcome the delay to the reforms while they focus on managing the impact of Covid-19. The move also means that they will have more time to prepare for the changes.
3. Changes to written statements of employment particulars
Three key changes to written statements will apply from 6 April 2020:
- All new joiners (workers and employees) from 6 April 2020 will be entitled to a written statement setting out certain key terms of their employment
- Employees and workers must be provided with their written statement on or before their first day of employment
- Extra information must be included in written statements beyond what is currently required, including:
- the hours and days of the week the worker /employee is required to work, and whether they may be varied and how
- entitlements to any paid leave
- any other benefits not covered elsewhere in the written statement
- details of any probationary period
- details of certain training provided by the employer.
4. New right to parental bereavement leave and pay
A new right to parental bereavement leave and pay comes into force on 6 April 2020.
It will give employed parents the right to 2 weeks' leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. Parents will also be able to claim pay for this period, subject to meeting the eligibility criteria.
Employers may wish to update their policies for this new right.
5. Changes to holiday pay calculations – workers without fixed hours or pay
From 6 April 2020, the reference period used to calculate holiday pay increases from 12 weeks to 52 weeks (or if a worker does not have 52 weeks’ service, however many weeks they have accrued).
The government has updated its guidance on calculating statutory holiday pay for workers without fixed hours or pay to take this change into account.
6. Employer NICs on termination payments over £30,000
Termination payments above £30,000 are subject to employers' national insurance contributions (class 1A NICs) from 6 April 2020. As with income tax, employer's NICs are only payable on the amount of the payment over £30,000.
7. Changes to agency workers' rights
Three key changes to agency workers' rights apply from 6 April 2020:
- By 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.
Under the 'Swedish derogation' agency workers could agree a contract which would remove their right to equal pay with permanent counterparts after 12 weeks working at the same employer. From 6 April 2020, these contracts will no longer be allowed. After 12 weeks, all agency workers will be entitled to the same rate of pay as their permanent colleagues.
- Before agreeing the terms of work, all agency workers must be provided with a key information document that sets out the key details of their relationship and key terms and conditions with their agency.
- Agency workers who are considered to be employees will be protected from unfair dismissal or suffering a detriment if the reasons are related to asserting rights associated with The Agency Worker Regulations.
8. Changes to ICE (Information and Consultation of Employees) Regulations
From 6 April 2020, there will be a reduction in the percentage of employees required to make a valid request for an agreement on the sharing of information and consultation within the workplace.
Currently at least 10% of the workforce must put in a request before an employer is obliged to take steps to comply with this right, but this will be reduced to 2%. The requirement that at least 15 employees make the request will remain.
9. Increases to statutory redundancy payments and unfair dismissal awards
From 6 April 2019 new increased compensation limits for employment tribunal awards will apply. The changes are (with the previous year's amounts in brackets):
- the maximum amount of a week's pay (used for calculating a redundancy payment or for various awards including the unfair dismissal basic award): £538 (increased from £525)
- the maximum amount of an unfair dismissal compensatory award: £88,519 (increased from £86,444).
These rates apply where the effective date of termination is on or after 6 April 2020.
10. Increase in National Minimum Wage, Statutory Sick Pay and pay for family-related leave
The National Living Wage and National Minimum Wage rates will increase on 1 April 2020 to:
- Workers aged 25 and over: £8.72 (National Living Wage)
- Workers aged 21-24: £8.20
- Workers aged 18-20: £6.45
- Workers aged 16 or 17: £4.55
- Apprentices: £4.15.
SSP and statutory pay for family-related leave will increase from 6 April 2020 as follows:
- The weekly rate of statutory sick pay: £95.85.
- The weekly rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay: £151.20.
For further information or help to get your business prepared for these changes, please speak to Frances Ross or your usual contact in the team.