Due to (and yes I am going to say it) Brexit, many employment law developments in the UK have stalled. However, there are still some important changes coming into effect in 2020 that businesses should start preparing for. So what’s in store for us for quarter 1 of 2020 I hear you cry!
We have outlined below key employment law changes which will come into effect in April this year.
1. New right to a written statement of terms - Effective 6 April 2020
Current position - Employees who have been continuously employed for more than one month must be provided with a written statement of terms within two months of their employment commencing.
Change - From 6 April 2020, all new employees and workers will have the right to a statement of written particulars of employment from day one. Additional information will have to be included as part of the extended right. Given that this new obligation arises from the first day of employment, employers should begin preparation of the revised statement of particulars or provide the employment contract during the recruitment stage ensuring these include every element of the new requirements.
2. Amendments to the agency workers rules - Effective 6 April 2020
Current Position - The Agency Worker Regulations 2010 (“AWR 2010”) entitles agency workers to receive the same pay and basic working conditions as direct recruits once they have completed 12 weeks’ continuous service working in the same role. However, the Swedish Derogation currently provides an exemption to the right to equal pay, if agency workers are employed under a permanent contract of employment with the temporary work agency and are paid by the agency for periods between assignments. In addition to this, all those seeking agency must be provided with a key facts statement setting out the terms under which they will undertake the work with the agency.
Change - From 6 April 2020, the Swedish Derogation will be removed. Once agency workers have satisfied the 12-week qualifying period, they will be entitled to equal pay in the same way as workers who are engaged directly by the employer. Either on or before 30 April 2020, agency workers whose existing contracts contain a Swedish Derogation provision must be provided with a written notification by the agency, that it will no longer have effect.
3. IR35 rule changes for the private sector – Effective 6 April 2020
Current Positon - Presently, IR35 rules apply where an individual personally performs services for another person (aka the client), through an intermediary (usually a personal service company), and if the services were provided under a direct contract, then the worker would be regarded, for tax purposes as being employed by the client. Currently, it is the intermediary company’s responsibility to determine whether IR35 applies or not.
Change –applicable to medium and large sized businesses in the private sector. As a result of the change, for all contracts entered into, or payments made on or after 6 April 2020, the onus will shift from the intermediary to the client to make a status determination regarding the individual. This means that responsibility for accounting for tax and national insurance will shift to the party who pays for the individual's services.
Prior to these changes, it is important that medium and large businesses carry out an assessment to determine whether the new rules apply to their independent contractors and review their contracts and pay arrangements.
Please note that small businesses will not be caught by the changes.
4. Holiday pay reference period adjustment – Effective 6 April 2020
Current Position - for those with variable hours and variable rates of pay, the holiday pay reference period is currently 12 weeks.
Change - the holiday pay reference period will increase from 12 weeks to 52 weeks. This means that employers will need to look back at the previous 52 weeks where a worker has worked and received pay, ignoring any weeks not worked or where no pay was received, to calculate the average the weekly pay.
5. Parental Bereavement Leave – Effective 6 April 2020 (TBC)
Current Position – Employers discretion
Change - The Parental Bereavement (Leave and Pay) Act 2018 is expected to come into force in April 2020. If it does come into force, bereaved parents will have the right to two weeks of leave following the loss of child under the age of 18, or a stillbirth after 24 weeks of pregnancy.
6. National Living Wage (“NLW”) and National Minimum Wage (“NMW”) Increases – April 2020
The NLW for workers aged 25 and over will increase from £8.21 to £8.72 per hour
The NMW for 21- to 24-year-olds will increase from £7.70 to £8.20 per hour
The NMW for 18- to 20-year-olds will increase from £6.15 to £6.45 per hour
The NMW for 16- to 17-year-olds will increase from £4.35 to £4.55 per hour
The apprentice rate for those aged under 19 or in the first year of an apprenticeship will increase from £3.90 to £4.15 per hour
For help and advice please contact Emma-Louise Hewitt on 0808 166 8827 or email on e.hewitt@sydneymitchell.co.uk
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