Employment Law Changes Effective Today
Alan Kitto
With all of the updates about coronavirus, it’s easy to forget that today is the start of a new financial year and the date on which a number of employment law changes take effect.
Calculating Holiday Pay
From today, Regulation 16 of the Working Time Regulations 1998 has been 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.
In practical terms, when calculating what an employee should be paid for holiday pay, you will need to average their earnings over the preceding 52 weeks and not the preceding 12 weeks as has been the case up until yesterday.
Notwithstanding this, press coverage in January 2020 reported the Prime Minister’s plans to hand judges in the lower Courts (such as Employment Tribunals and Employment Appeal Tribunals as opposed to the Supreme Court) the power to overturn previous EU rulings on holiday entitlement and pay. This is a clear indication that we could see rulings in the UK that will mean that holiday pay reverts back to basic salary and not have to include provision for overtime, bonuses, commission etc.
Bereavement Leave and Pay
The Parental Bereavement (Leave and Pay) Act 2018 came into force in today, 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.
National Living and Minimum Wage
From today, the new rates are:
The National Living Wage for ages 25 and above - £8.72
The National Minimum Wage for 21 to 24-year-olds - £8.20
For 18 to 20-year-olds - £6.45
For under-18s - £4.55
For apprentices - £4.15
Please remember that HMRC require that these minimum rates need to be paid in each pay period (month or week depending if you pay monthly or weekly); where you pay monthly you nee to factor in to your calculations that some months have more working days than others. If you’re not sure what that means for you, let me know.
Written Statement of Terms and Conditions
From today all workers are entitled to receive a statement of written terms and conditions of employment (or engagement), a right which is currently only available to employees. In addition this must be given on or before the first day of employment rather than within the first two months of employment as was the case.
The information that must 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
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 today, all termination payments above the £30,000 threshold will be subject to Class 1A National Insurance Contributions.
IR35 (Delayed to April 2021)
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. This should have taken effect today but this has now been delayed to April 2021.
New Staff Handbook and Contract Wording
We’ve taken the last few weeks to update our Staff Handbook and Employment Contract wording to factor in the above changes as well as some other tweaks and will be issuing these to our retained clients in the next week or so. Part of this update will include new policies on Recruitment, Wellbeing and Menopause.
If you don’t currently retain our services and would like to or are interested in using our new documents, please let us know.