Employment Law Changes in 2020
Alan Kitto
As 2019 draws to a close, we thought we’d take a few minutes to outline the planned changes to employment law in 2020 and the Government’s intentions within this term following the recent general election.
Calculating Holiday Pay
From 6 April 2020, Regulation 16 of the Working Time Regulations 1998 will be amended to increase the reference period for determining an average week's pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks, or the number of complete weeks for which the worker has been employed.
Notwithstanding this, recent press coverage reports the Prime Minister’s plans to hand judges in the lower Courts (as opposed to the Supreme Court) the power to overturn EU rulings on holiday entitlement and pay. This is a clear indication that we could soon see rulings that overturn previous judgements that state that more than basic salary need needs to be included when calculating holiday pay. Watch this space.
Bereavement Leave and Pay
The Parental Bereavement (Leave and Pay) Act 2018 is expected to come into force in April 2020, this gives all employed parents who lose a child under the age of 18 or suffer a still birth from 24 weeks of pregnancy, the right to two weeks’ leave from day one of employment. A parent may then be paid statutory parental bereavement pay if they have at least 26 weeks service. More details to follow.
National Living and Minimum Wage
From April 2020, the new rates are:
The National Living Wage for ages 25 and above - up 6.2% to £8.72
The National Minimum Wage for 21 to 24-year-olds - up 6.5% to £8.20
For 18 to 20-year-olds - up 4.9% to £6.45
For under-18s - up 4.6% to £4.55
For apprentices - up 6.4% to £4.15
Written Statement of Terms and Conditions
From 6 April 2020 all workers will be entitled to receive a statement of written terms and conditions of employment from day one, a right which is currently only available to employees. This means that a statement must be given on or before the first day of employment rather than within the current two month window.
The information that has be given in the statement includes;
The days of the week the worker is required to work
Whether the working hours may be variable and how any variation will be determined
Any paid leave to which the worker is entitled
Details of all remuneration and benefits,
Any probationary period and any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker
Termination Payments
From 6 April 2020, all termination payments above the £30,000 threshold will be subject to Class 1A National Insurance Contributions.
IR35
The off-payroll working rules (also known as IR35) will be extended to large and medium-sized companies in the private sector (i.e. companies with more than 50 employees). This means any payments to Consultants and Contractors currently engaged may need to have Income Tax and National Insurance Contributions at source.
EU Settlement Scheme
With Brexit now set for 31 January 2020, details of what EU, EEA or Swiss citizens that currently live and/or work in the UK need to do to remain in the UK post Brexit. EU, EEA or Swiss citizens need to apply to the EU Settlement Scheme to continue living in the UK after 30 June 2021. If successful, individuals will either receive settled or pre-settled status.
The Home Office has published an employer toolkit to help guide employers through the new EU settlement scheme.
Brexit (and The Government’s Manifesto)
There will be no immediate changes to UK employment law specifically as a result of the UK leaving the EU on 31 January 2020. It is commonly thought that we may ultimately see the withdrawal of the Agency Worker Regulations which have been universally unpopular and perhaps some changes to TUPE Regulations but these are unlikely to a priority for the Government.
The Queen’s Speech on 19 January 2020 gives us a steer on the Government’s intentions:
There will be an Employment (Allocation of Tips) Bill to ensure that tips go direct to workers and not their bosses.
The Government will continue to deliver on the commitments set out in the Good Work Plan.
The Government bring forward measures to encourage flexible working and to introduce the entitlement to leave for unpaid carers.
An Australian-style points based immigration system will be introduced for skilled workers across the world. From 2021, as a precursor the Immigration and Social Security Co-ordination (EU Withdrawal) Bill will provide for ending the free movement of EU citizens under UK law; the power to align the treatment of EU citizens arriving after January 2021 with non-EU citizens, and to maintain the treatment of EU citizens resident in the UK before exit day; clarifying the immigration status of Irish citizens in the UK once the free movement rules are removed from UK law; confirming the deadline for applications to be made under the EU Settlement Scheme; giving EU citizens and their family members who apply a right of appeal against EU Settlement Scheme decisions; The power to make changes to the current rules for access to benefits and social security coordination for EU nationals.
The Government pledges to increase the National Living Wage (NLW), reaching two-thirds of median earnings within five years (projected to be around £10.50 p.h. by 2024) and to extend the NLW to workers aged 21 and over within five years.
Interestingly, the Government does not make any mention of IR35 in the Queen’s Speech
For more information on anything detailed above, please get in touch.