Important changes to employment law from April 2020

Various changes to employment law will come into force from April.   It is important for all businesses to be aware of the changes in order that appropriate steps can be taken to prepare for the changes.

Upcoming changes include:

1. National Minimum Wage increases

New rates will apply from 1 April 2020.The rates will increase as follows:

  • The National Living Wage (for over 25 year olds) will increase from £8.21 to £8.72.
  • The National Minimum Wage will rise across all age groups, including:
    • An increase from £7.70 to £8.20 for 21-24 year olds;
    • An increase from £6.15 to £6.45 for 18-20 year olds;
    • An increase from £4.35 to £4.55 for Under 18s; and
    • An increase from £3.90 to £4.15 for Apprentices.

        2. New rules on employment contracts

Under the current law, employees are entitled to receive a written statement of the particulars of their employment within two months of starting work.This information is generally included in the contract of employment.

Under the new rules, workers as well as employees will be entitled to receive a written statement of the particulars of their employment on the first day of their employment. This includes casual or temporary workers. In addition, the amount of information which must be provided has been extended to include:

  • the days of the week the worker is required to work, whether the working hours or days may be variable and how they may vary;
  • details of any paid leave entitlement which is additional to annual leave and holiday pay, such as family related leave;
  • details of all remuneration and benefits;
  • details of any probationary period, including any conditions and its duration, and
  • details of any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.

These changes relate to any person starting work on or after 6 April 2020.

         3. Holiday pay

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 come into force on 6 April 2020.They amend existing legislation to increase the reference period for determining an average week’s pay (for holiday pay purposes) 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 change is intended to ensure that temporary or casual workers are not disadvantaged by being required to take their holiday during or immediately following a quiet period when their average earnings may be lower.

        4.  Agency Workers

The Agency Workers (Amendment) Regulations 2019 come into force on 6 April 2020. The regulations will remove the “Swedish Derogation” from the Agency Workers Regulations 2010 (which currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met). Agencies must inform relevant agency workers by 30 April 2020 that the Swedish Derogation no longer applies.

In addition, from 6 April 2020, the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 require temporary work agencies to 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.

        5.  Tax

All termination payments above the £30,000 tax free threshold will be subject to class 1A NICs from 6 April 2020.At present, the payments over £30,000 are liable to income tax only.

Additionally, from 6 April the off-payroll working rules which currently apply to the public sector will be extended to large and medium-sized companies in the private sector. The essence of the rule is that all payments made to personal service companies will be treated as payments of employment income on which the client (or a third-party intermediary) must account for tax. This shifts responsibility for IR35 tax compliance from the personal service company to the client or intermediary.

        6.  Parental Bereavement Leave

From 6 April 2020, all employees who lose a child under the age of 18, or suffer a stillbirth after 24 weeks of pregnancy, will be entitled to 2 weeks’ statutory leave to be taken in one block or as two separate blocks of a week. Employees with at least 26 weeks’ service who meet minimum earnings criteria will also qualify for Statutory Parental Bereavement Pay.

Taylor Walton’s employment team is happy to assist your business with any queries relating to the upcoming changes.