April is always a busy month in the employment law calendar and this year is no exception. There have been a number of key changes to legislation that you need to be aware of as well as several increases to statutory payments.
From 1 April 2020 the National Living Wage for workers aged 25 and over increased from £8.21 to £8.72 an hour. The government has also resumed the public ‘naming and shaming’ of businesses that don’t comply with the NMW regulations.
The statutory rates of maternity pay, paternity pay, adoption pay and shared-parental leave pay increased from £148.68 to £151.20 per week or 90% of an employee’s weekly earnings, whichever is lower.
Statutory sick pay has also increased from £94.25 to £95.85 per week.
We have produced a “Facts and Figures” table showing all of the above as well as other useful information such as qualifying service periods for different employment rights. This is available here.
Check Contracts of employment
From 6 April 2020, all employees and workers are entitled to a written statement of particulars on or before their first day of employment. This includes casual and zero hour workers.
There has also been a change to the details that must be included in a written statement and employers must now include specific days and times of work, other paid leave and any other benefits, any probationary periods, how long the job will last and any training a worker is entitled to.
For further details of these changes click here.
Assess Agency Workers
Agency workers are entitled to the same pay and leave as permanent colleagues after 12 weeks’ work. Agency workers could opt out of this, in return for pay between contracts known as the “Swedish derogation” principle. This has been abolished and employers must now ensure that any agency worker who has been working for them for over 12 weeks are paid equally to other staff.
Agency workers are also now entitled to a ‘Key Information’ document including information on the type of contract, minimum expected rate of pay, how they will be paid and by who before they agree to any terms of employment.
Calculating Holiday pay
The holiday pay reference period will increase from 12 weeks’ average pay to 52 weeks’ average pay. This means for workers with variable hours’ employers will need to look back across a 52-week period to calculate the average weekly pay. If a worker has been working for less than a year, then the calculation will be from the period of complete weeks.
This means that those workers who have irregular working partners are not disadvantaged if they take they holidays at a quieter time of year.
New Parental Bereavement Leave
There is a new right for parents to take up to 2 weeks’ leave and if eligible, receive statutory bereavement pay, upon the death of a child under the age of 18, including where a child is still-born after 24-weeks of pregnancy.
Leave is paid at the lower of 90% of salary or £151.20 per week.
For further details click here.
The government recently announced that the extension of the IR35 off-pay roll working rules to medium and large companies in the private sector has been postponed by a year to April 2021. For further details click here.
Changes to taxation of termination payments
All termination payments above the £30,000 threshold are now subject to class 1A (Employers) National Insurance Contributions. Employers will need to factor this additional cost into any termination payments.
Information and consultation requirements
The threshold to request to set up information and consultation arrangements has been lowered from 10% to 2% of employees, subject to the existing minimum of 15 employees.
The maximum compensatory award for unfair dismissal has increased from £86,444 to £88,519.
The maximum amount of a week’s pay used to calculate statutory redundancy payments and various awards has increased from £525 to £538.
The statutory day rate for a Guarantee Payment used during a period of lay-off or short-time working has increased from £29 a day to £30 a day.
For further details see our Facts and Figures here.
Employment partner, Matthew Potter comments:
"Whilst this is no doubt a difficult time for businesses given the current Covid-19 pandemic, it is still important to remember these key legislative changes that have come into effect. If you have not done so already, use this time as an opportunity to review policies and update contracts to reflect the latest updates.
If you require any assistance with this or have any questions regarding the changes, please do not hesitate to get in touch with a member of the team.”
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.