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Employment law – what is changing?

Posted on 05 February 2020

Employment law – what is changing?

Amidst the debate and uncertainty on workers' rights following Brexit, there are a number of non-Brexit employment law changes expected to come into force from 6 April 2020. Where applicable, employers should consider any steps they may need to take to ensure compliance in good time before April.                             

  1. Written statements – The right to a written statement of terms of employment will be extended to all workers, not just employees. This means that a wider range of individuals who work for you will be entitled to a statement even if they don’t have a contract of employment. Moreover, the written statement must now be given on or before the first day as opposed to within two months of commencing work. The statement must include additional information not already covered, for example details of probationary periods, paid leave other than holiday, benefits and any training entitlement.

    Now is a good time to prepare for the new requirements, making sure you have separate statements for employees and workers, that they contain all the mandatory information and that they are provided by the first day of employment. You do not have to issue new statements to existing employees unless they ask for one.
     
  2. Parental bereavement leave - It is expected that new rules on parental bereavement leave will come into force on 6 April 2020, giving all employees who lose a child the right to two weeks' statutory bereavement leave to be taken in one block or as two separate blocks of a week, in the 56 weeks following the death of the child. For employees with at least 26 weeks' service, the leave will be paid at the flat statutory rate (see below). Employers may choose to provide more generous leave and pay.

    Employers should review their policies (e.g. any compassionate leave policy) to ensure they cover the new parental bereavement leave, or introduce a new policy.
     
  3. IR35 – Changes to the IR35 regime that govern off-payroll working for individuals operating through personal service companies, will be extended to large and medium-sized companies in the private sector who engage them.  This will shift responsibility for IR35 tax compliance from the personal service company to the end user client (or fee payer if different) who will have to determine the status of the individual and, if IR35 applies, operate PAYE and pay employers' NICs on the fee.

    If you engage contractors in this way, you should review the arrangements, determine status for new and existing contractors and decide what action, if any, you need to take to comply with the new regime. To read more, click here [IR35 article].
     
  4. Termination payments - All termination payments above the £30,000 threshold will now be subject to class 1A (employer's) NICs.  Employers will need to factor in this additional expense when negotiating settlements.
     
  5. Holiday pay calculations - The reference period for determining an average week's pay for holiday pay purposes will increase from 12 weeks to 52 weeks, or if the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been employed.  This is intended to ensure fairness in the calculation of a day's holiday for workers with irregular work patterns.
     
  6. Agency workers - The "Swedish derogation" rule (which currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met) will be abolished and by no later than 30 April 2020 work agencies must provide all affected workers with a written statement informing them of this change.

    In addition, temporary work agencies must provide agency work-seekers with a "Key Information" document, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom.
     
  7. Employee engagement – In an attempt to make it easier for employees to request that their employer consults with them and provides information, the threshold to request an information and consultation agreement under the ICE Regulations will be lowered from the current threshold of 10% of the workforce to 2%, subject to a minimum of 15 workers.
     
  8. Rates and limits –the rates for statutory maternity, adoption, paternity and shared parental pay are expected to rise from the current £148.68 to £151.20 per week. This will also apply to statutory parental bereavement pay once in force.  The new national minimum wage rates that apply from April will be £8.72 per hour for workers aged 25 and above, £8.20 for 21-24 year olds, £6.45 for those aged between 18-20, £4.55 for those aged under 18 and £4.15 per hour for apprentices. Statutory sick pay is expected to increase from £94.25 to £95.85.
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