2020 Employment Law Changes and HR Updates
The first week of the New Year is out the way and everyone is now back into the usual routine. The year has started with a new government, Brexit just around the corner, and a number of employment law changes this year that will impact on employers. A number of the key changes take place in April 2020, so now is the time to ensure you have put these measures in place.
We wanted to share some of the key developments to ensure your business is fully prepared. Here’s our 7 Point Checklist:
Conduct Brexit workforce planning
Following Brexit on 31 January 2020, there will be a transition period until 31 December 2020. In addition, EEA nationals will still be able to come and work in the UK.
You should ensure that all your EEA workers obtain settled or pre-settled status. This will enable them to stay at the end of the transition period. The current position is that EEA nationals who are resident in the UK by 31 December 2020 have until 30 June 2021 to make an application.
You should also prepare for the new immigration system that will be in place after the transition period. The Migration Advisory Commission is expected to report in January 2020, having considered options for a new points-based system.
If you have not already done so, you should carry out an audit of your workforce and consider where there may be staffing issues if you currently rely on EEA nationals. You should look for potential skills gaps and consider the impact of the new immigration system. You may need to obtain a sponsor licence to recruit the staff you need from abroad.
Statutory Rate increases and National Minimum Wage
The rates for the national minimum wage will increase on 1 April 2020. The national living wage rate, for workers aged 25 and over, will increase from £8.21 to £8.72 per hour. The rates for younger workers will also increase, with hourly rates rising to £8.20 for workers aged at least 21. Furthermore, under 25 will rise to £6.45 for workers aged at least 18 but £4.55 for workers aged under 18 who are no longer of compulsory school age. The rate for apprentices will rise to £4.15 per hour.
You should ensure that you also comply with changes to other statutory rates. The proposed rate for statutory maternity, adoption, paternity and shared parental pay is £151.20, up from £148.68. The increase normally takes effect on the first Sunday in April, which in 2020 is 5 April. The rate for statutory sick pay is expected to increase on 6 April 2020. The proposed new rate is £95.85, up from £94.25 per week.
Based on current projections, the NMW rate by April 2024 could be £10.50 per hour.
Amend policies to include parental bereavement leave and pay
The right to parental bereavement leave and pay is expected to come into force in April 2020. The right will allow parents of a child under the age of 18 who has died to take two weeks’ leave. It will be available to the birth parents or those with parental responsibility for the child and can be taken within 56 weeks of the child’s death, in a block of two weeks, or two blocks of one week.
Employees will be entitled to parental bereavement leave from day one of their employment. However, there will be a qualifying period of 26 weeks for entitlement to parental bereavement pay.
The government has not yet published the regulations that will finalise the details for the introduction of parental bereavement leave and pay. We will of course keep you posted on these developments in due course.
New rules on written statements of particulars
From 6 April 2020, you must provide a written statement of employment particulars to all workers, not just to employees. The current approach where you can issue during the first 8 weeks of employment will be replaced with this new change. In addition, you must supply this on Day 1 of employment at the latest.
We believe you should be doing this well in advance anyway – you want your new employees to know all the terms and conditions before they accept your offer of employment, and this reduces any confusion.
The information that you provide to your new employees will also be expanded to include extra information on variable working hours. This also includes paid leave other than sick pay, benefits, probationary periods and training. This is quite a change and therefore employment contracts will need updated to reflect this.
Holiday pay for workers with irregular hours
There’s a big change coming around holiday pay. The reference period for calculating holiday pay for workers who do not work regular hours will increase from 12 to 52 weeks on 6 April 2020.
This change is part of the Government’s Good Work Plan and will help workers missing out on holiday pay if they take annual leave in the 12 weeks following a quieter period at work.
You will now need to pay workers who do not work normal hours their average weekly pay, calculated over the previous year, rather than the previous 12 weeks. We’ve seen a number of successful cases recently where some employers continue to not pay average pay for holidays, and we would urge any employers still adopting this practice to proactively change their approach before April 2020. The Government has committed to a Holiday Pay Awareness Campaign prior to these changes coming in. If you’re not complying now, you can expect Employment Tribunal claims which can be backdated. It’s far better to act now and avoid such claims.
In the future, there will also be a state-led enforcement regime to assist “vulnerable” workers. We await further developments on this.
Good Work Plan
The Good Work Plan comes into effect in April. We’ll share further information on this in the coming weeks, but key priorities include:
Right to request a more predictable and stable contract
This new right will mean an employee can request a more predictable and stable contract after 26 weeks of employment.
Examples of what might be requested include a guaranteed minimum number of hours and certainty as to the days on which they will be asked to work.
This new development will predominantly benefit individuals who are employed as casuals or on zero hours contracts. An employer will have three months to make their decision on any such request.
Break in continuous service
Currently, a gap of just one week can break an individual’s continuity of service. This break period will be extended from one week to four weeks, helping those employees who work on a sporadic or casual basis to qualify for more employment rights (such as the right not to be unfairly dismissed or the right to statutory maternity pay) that require a particular length of service.
Protecting agency workers
After 12 weeks of service, an agency worker is entitled to receive the same level of pay as a permanent worker. Furthermore, this is unless the agency worker opts out of this right and instead elects to receive a guaranteed level of pay between their temporary roles.
This opt-out will be removed (proposed to take effect in April 2020) because often agency workers are financially worse off.
Tips and gratuities
Rules will be implemented to ensure that tips are passed directly to the individual, rather than taken by the employer.
Statement of basic terms
From April 2020, it will not just be employees who are entitled to receive a written document setting out their basic terms. Furthermore, the right will be extended to workers too. This is a new entitlement that should bring clarity for many workers regarding their contractual terms.
The reference period used to calculate holiday pay will be extended from 12 weeks to 52 weeks, which is an important development for those who work variable hours. Currently a worker may get different rates of pay during holidays taken. This is depending on how many hours they worked in the three months previous.
In response to recent case law, there will also be a campaign to ensure that individuals better understand their rights and a new holiday entitlement calculator will be launched.
State enforcement of holiday pay
Currently, when an employer does not pay holiday pay correctly, the individual has to bring employment tribunal proceedings. In the future, there will also be a state-led enforcement regime to assist “vulnerable” workers. We await further developments on this.
Naming and shaming
Employers who do not pay the compensation awarded by an employment tribunal following a successful claim will now not only face potential enforcement proceedings (where a penalty notice can be issued of up to 50% of the unpaid award) but also the prospect of being publicly named and shamed. This will seriously damage reputations.
As you can see, there are lots of changes on the horizon as a result of the Good Work Plan. In addition, you will want to start thinking practically about how it will impact you and how we can help.
Look out for other changes on the horizon
In the Queen’s speech in December, the Government announced that there will be an Employment Bill. The key elements of which would be:
- “creating a new, single enforcement body, offering greater protections for workers;
ensuring that tips left for workers go to them in full;
- introducing a new right for all workers to request a more predictable contract;
- extending redundancy protections to prevent pregnancy and maternity discrimination;
- allowing parents to take extended leave for neonatal care; and introducing an entitlement to one week’s leave for unpaid carers; and
- subject to consultation, making flexible working the default unless employers have good reason not to.”
So, lots to do in 2020. In addition to all of the above, this year will also be important for employers in terms of attracting and retaining talent. As such, it’s vital you build the capability of your Leadership Teams and create a positive workplace culture.