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2020 Employment Law Changes

This month sees a wide range of changes to employment law come into effect. Here are a some of the main changes that may affect your business

National Living Wage (NLW) and National Minimum wage (NMW)

 

1st of April saw another increase in the National Living Wage as follows:

• Pay for Workers aged 25 rises from £8.21 an hour to £8.72 an hour.
• Pay for Workers aged 21-24 rises from £7.70 to £8.20 an hour
• Development rate for workers aged 18-20 increases from £6.15 to £6.45 an hour
• Young workers rate for workers aged 16-17 increases from £4.35 to £4.55 an hour
• Apprentice rate increases from £3.90 to £4.15 an hour

The Government will also resume the public naming and shaming of businesses that do not comply with National Minimum Wage Regulations.

Read our Case Study relating to carrying out a NMW/NLW pay review using People Inc.  

Gender Pay Gap Reporting

The government has suspended the enforcement of Gender Pay Gap reporting for 2019/20 due to the Coronavirus outbreak.

 

Parental Bereavement Leave and Pay

The new Parental Bereavement Leave and Pay Act 2018 came into force on 6th April.

The new regulations gives employees the right to two week’s leave (taken as one block or as two non-consecutive one week blocks) if they lose a child under the age of 18 or suffer a still birth from the 24th Week of pregnancy. The leave can be taken any time during the 56 weeks following the child’s death.

 

IR35

The rollout of R35 to the private sector has been postponed till April 2021.
Further information can be found on the Governments website – https://www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35

 

Tax on employee termination payments

From 6th April, Employee termination payments exceeding £30,000 will become subject to employer National Insurance Contributions

 

Compensation Limits

The rates for tribunal compensation were increased as of 6th April. The new rates are:

• Limit on guaranteed payments – £30
• Limit on a week’s pay – £538
• Maximum basic award for unfair dismissal and statutory redundancy payment – £16,140
• Minimum basic award for unfair dismissal – £6,562
• Maximum compensatory award for unfair dismissal – £88,519

Further information can be found on the CIPD Website https://www.cipd.co.uk/knowledge/fundamentals/emp-law/about/statutory-rates

 

Good Work Plan

The Good Work plan is the Governments reform of employment legislation aimed at improving working practices for UK workers. So far this has included employers having to provide all employees with itemised payslips and increasing the maximum penalty that can be imposed following an employment tribunal.

More information about the Good Work Plan can be found here: https://www.gov.uk/government/publications/good-work-plan/good-work-plan

The following legislation came into effect on 6th April 2020 as part of the Governments Good Work Plan.

Agency Workers – Must be informed of their equality of treatment rights. This includes guaranteeing equal pay with comparable permanent staff for agency workers once they reach 12 week’s service in one assignment.

More information can be found here http://www.legislation.gov.uk/ukdsi/2019/9780111177297

Annual Leave – The reference period used to calculate an employee’s holiday pay entitlement has been increased from 12 paid weeks to 52 weeks.

More information can be found here https://www.gov.uk/government/publications/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay–2

Statement of Terms – Additional information must now be included in the Written Statement of Terms that employers have to issue to new employees within 2 months of their start date.

More information can be found here https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars