Employment law and other important changes

Since April 2019:

  • Technical amendments to employment law to ensure a smooth Brexit takes effect
  • Employment tribunal award limits increase
  • Requirement for payslips to state hours worked where pay varies
  • Lower earnings limit for national insurance (NI) contributions increases
  • Increase in minimum contribution level for pensions auto-enrolment takes effect
  • Maximum penalty for aggravated breach increases to £20,000.

April 2020

*The following information links to and is shared from XpertHR.

National minimum wage rises* – 1 April 2020

The rate of the national living wage, the rate for workers who are aged 25 and over, increases from £8.21 to £8.72 per hour. The national minimum wage for workers aged at least 21 but under 25 rises from £7.70 to £8.20 per hour. The rate for workers who are aged at least 18 but under 21 increases from £6.15 to £6.45 per hour. The rate for workers aged 16 or 17 rises from £4.35 to £4.55 per hour. The apprentice rate rises from £3.90 to £4.15 per hour. The accommodation offset increases from £7.55 to £8.20 per day.

Statutory maternity pay and other family-related statutory pay rates increase* – 5 April 2020

The draft Social Security Benefits Up-rating Order 2020 sets out the proposed increases to the rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay from £148.68 to £151.20 per week.

More flexibility in national minimum wage rules for salaried hours work* – 6 April 2020

New rules increase flexibility for employers in how they calculate pay for salaried hours work, which permits an employer to operate a pay-averaging model over a year. The draft National Minimum Wage (Amendment) (No.2) Regulations 2020 amends the National Minimum Wage Regulations 2015 (SI 2015/621) so that employers are able to:

  • pay salaried hours workers in payment periods other than monthly or weekly, such as fortnightly or four-weekly
  • choose the calculation year for salaried hours workers
  • make premium payments to salaried hours workers in respect of basic hours, which will not be taken into account in national minimum wage calculations.

Increase in holiday reference period from 12 weeks to 52 weeks – 6 April 2020

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 (SI 2018/1378) increase the reference period used for determining a week’s pay when calculating holiday pay for workers with irregular hours from 12 weeks to 52 weeks. The government’s Good work plan states that the changes will allow greater flexibility for workers in choosing when to take holiday, particularly for those in seasonal or atypical roles that limit some workers from benefiting from their full holiday pay entitlement.

Statutory sick pay rises* – 6 April 2020

The draft Social Security Benefits Up-rating Order 2020 sets out the proposed increase to the rate of statutory sick pay from £94.25 to £95.85 per week.

Employment tribunal award limits increase* – 6 April 2020

The Employment Rights (Increase of Limits) Order 2020 (SI 2020/205) increases the limits applying to various tribunal awards and other amounts payable under employment legislation, including the maximum amount of a week’s pay for the purpose of calculating the basic award for unfair dismissal and a redundancy payment, which increases to £538, and the maximum amount of the compensatory award for unfair dismissal, which increases to £88,519.

Reduction to threshold for a request to set up information and consultation arrangements – 6 April 2020

The threshold required for a valid request to set up information and consultation arrangements under the Information and Consultation of Employees Regulations 2004 (SI 2004/3426) is reduced from 10% to 2% of employees. The requirement for the request to be made by a minimum of 15 employees remains in place.

The new threshold is provided for by the draft Employment Rights (Miscellaneous Amendments) Regulations 2019.

Extension of the right to a written statement to all workers – 6 April 2020

The draft Employment Rights (Miscellaneous Amendments) Regulations 2019 extend the right to a written statement of employment particulars to all workers (including employees).

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 (SI 2018/1378) provide that access to a written statement will be a day one right for all workers (including employees). Employers will also have to provide additional information as mandatory content for a written statement.

Parental bereavement leave rights take effect* – 6 April 2020

The Parental Bereavement (Leave and Pay) Act 2018 provides for at least two weeks’ leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees with 26 weeks’ continuous service will be entitled to paid leave at the statutory rate and other employees will be entitled to unpaid leave.

Change to tax treatment of termination payments above £30,000 introduced* – April 2020

Employers will be liable to pay Class 1A national insurance contributions on termination payments above £30,000 that are subject to income tax by the employee. The new measure will be introduced in the National Insurance Contributions Bill.

Changes to look out for in the coming months

Reform to intermediaries legislation (IR35) is extended to private sector – 6 April 2021

The rules on off-payroll working in the private sector are amended, with the April 2017 changes to intermediaries legislation (IR35) in the public sector being extended to the private sector. The organisation, agency or other third party are made responsible for operating IR35, as opposed to the individual being engaged. However, small organisations are exempt.

Technical amendments to employment law following the UK’s exit from the EU take effect* – date TBC

The government introduces legislation to ensure that employment laws continue to operate effectively at the end of the transition (implementation) period on 31 December 2020, which is now in place following the UK’s exit from the EU. The legislation makes minor technical changes, including amending and removing inappropriate language and references.

New legislation to ensure that tips and gratuities go to staff* – date TBC

The government intends to introduce legislation to prevent employers from taking tips and gratuities that should go to staff. The government’s announcement states that the changes are to prevent ‘poor tipping practices, including excessive deductions being made from tips left by customers’ and that it will introduce the legislation ‘at the earliest opportunity’.

Increase to the length of time required for continuity of employment to be broken* – date TBC

The time required to break a period of continuous service extends from one week to four weeks. Employees can have a gap of up to four weeks in their service with an employer without it affecting their entitlement to statutory employment rights. The government’s Good work plan states that the extension of time will make it easier for employees who work intermittently over a period of time for the same employer to access their rights.

New check-off arrangements take effect* – date TBC

The draft Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2017 implement new arrangements for check-off for public sector employers. Where a contract of employment or collective agreement contains arrangements for check-off, the arrangement can continue only where the trade union meets the administrative cost in respect of making the deductions and workers have the option to pay their trade union subscriptions by other means.

New right for workers to request a more stable contract* – date TBC

All workers will have the right to request a more predictable and stable contractual working pattern after 26 weeks’ continuous service. The new right was announced in the government’s Good work plan on 17 December 2018. It is intended to benefit workers who have irregular hours, for example under a zero hours contract, but who would like more certainty on the number of hours they work and/or the days on which they work.