Employment Law Changes in 2020; Make Sure Your Business Reflects them

The Election is over.  It's a new decade and a new economic business environment.

Businesses are now looking at the year ahead. Some eagerly, and some, perhaps anxious;y, to the anticipated labour law changes coming in from April this year.

Here is a glimpse is some things to expect.

  • The Parental Bereavement Leave and Pay Act 2018: - comes into force.  Considered long overdue by many, this new law will give all employed parents the right to 2 weeks' leave if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy.  Parents will also be able to claim pay for this period, subject to meeting eligibility criteria.

  • There are import changes to written statements of employment particulars which employers should be preparing for now.  In summary, all workers, not just employees, will be entitled to a written statement of employment particulars on or before their start date, (if taken on or after 6th April 2020).  There is also new information that written statements need to contact, so employers should spend some time now updating their contracts of employment for all their employees and workers.

  • Holiday Pay: - The reference period to calculate a 'week's pay' for holiday pay purposes will be extended from the previous 12 weeks of work to 52 weeks. Again, employers should seek advice on how to effect this change no so that they are ready to make the correct calculations from April.

  • Agency Workers' Rights: - In the ‘Good work plan’, published in December 2018, the government made a commitment to abolish a legal loophole known as the ‘Swedish derogation’ in the rules governing the use of agency workers. This allowed agencies to opt out of equalising the pay of agency staff with the permanent workforce when they had been with the same employer for more than 12 weeks, provided they paid the agency workers between assignments. The opt-out will cease on 6 April 2020 when the Agency Workers (Amendment) Regulations 2019 come into force.The government is also lengthening the reference period for determining an average week’s pay from 12 weeks to 52 weeks from 6 April 2020 - see the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018. The reform is intended to improve the holiday pay for seasonal workers, who tend to lose out over the way it is currently calculated. A third change will extend the entitlement to receive a statement of ‘written particulars’ (on basic employment terms and conditions) to include workers as well as employees and make it a day one right (see Part 3 of Employment Rights (Miscellaneous Amendments) Regulations 2019). Currently employers have up to two months to issue the statement to any employee working for them for more than a month.

  • From 6th April 2020: - there will be a reduction in the percentage of employees required to make a valid request for an agreement on the sharing of information and consultation within the workplace.  Currently, at least 10% of the workforce must put in a request before an employer is obliged to act.  This percentage will be reduced to 2%.  The requirement that at least 15 employees make the request will remain, however, so this law is still only likely to affect larger businesses.

  • May Bank Holiday: - If not already prepared, organisations should undertake staff planing now for the move of the normal May Monday bank holiday to Friday 8 May.

  • Holiday entitlement: - sick leave, maximum working hours: - Finally employers need to keep their eye on the fact that as we have now left the EU, the Conservative government has indicated that Workers rights protection will no be incorporated into a separate Bill, and not be part of the original Withdrawal Agreement Bill. If this Workers right protection Bill is passed, this will likely impact existing laws on holiday entitlement, sick leave, maximum working hours.  We can't do much on this now except prepare for what might be an uncertain road ahead.

  • Extension of IR35 to Private Sector: - HMRC issued draft rules and a consultation on off-payroll working on 22 January, closing on 19 February. The IR35 rules prevent contractors working through a Personal Service Companies (PCS), who are in similar roles to employees, paying less tax and NICs than employees. When the rules were introduced, contractors themselves assessed whether IR35 applied to them but, in April 2017, public sector employers were made responsible for deciding contractors’ tax status and for deducting the right amount of tax and NICs from fees they were paying to their PSCs. From 6 April, this responsibility applies to all private sector employers in a tax year with: More than 50 employees, an annual turnover over £10.2 million, a balance sheet worth over £5.1 million.  HMRC published guidance on the new rules, Prepare for changes to the off-payroll working rules (IR35), and draft regulations and a further consultation in 11 July 2019. The draft regulations say tax liability would lie initially with agencies, where these were used, but would pass to end user employers where an agency couldn’t pay.

Statutory rates and Compensation Limits: -

  • Maximum guarantee payments:

    • From 6 April 2019: £29 a day  (maximum £145, five days in any three-month period)

    • From 6 April 2020: £30 a day  (maximum £150, five days in any three-month period)

  • Maximum week's pay for calculating redundancy and unfair dismissal basic award:

    • From 6 April 2019: £525

    • From 6 April 2020: £538 

  • Maximum basic award for unfair dismissal and statutory redundancy payment:

    • From 6 April 2019: £15,750  (30 weeks' pay subject to the limit on a week's pay)

    • From 6 April 2020: £16,140  (30 weeks' pay subject to the limit on a week's pay)  

  • Minimum basic award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only:

    • From 6 April 2019: £6,408

    • From 6 April 2020: £6,562

  • Maximum compensatory award for unfair dismissal (unlimited for certain automatically unfair dismissals, for example, health and safety or whistleblowing):

    • From 6 April 2019: £86,444

    • From 6 April 2020: £88,519 

  • Additional award for failure to comply with reinstatement or re-engagement order:

    • From 6 April 2019: £13,650 - £27,300  (26-52 weeks' pay maximum)

    • From 6 April 2020: £13,988 - £27,976  (26-52 weeks' pay maximum)

  • Minimum compensation for employees excluded/expelled from trade union:

    • From 6 April 2019: £9,787

    • From 6 April 2020: £10,022 

  • Failure to allow right to be accompanied correctly:

    • From 6 April 2019: £1,050  (two weeks' pay capped at the statutory amount)

    • From 6 April 2020: £1,076  (two weeks' pay capped at the statutory amount)

  • Failure to give written statement of particulars:

    • From 6 April 2019: £1,050 or £2,100  (two or four weeks' pay capped at the statutory amount)

    • From 6 April 2020: £1,076 or £2,152  (two or four weeks' pay capped at the statutory amount)

  • Flexible working regulations:

    • From 6 April 2019: £4,200  (eight weeks' pay capped at the statutory amount)

    • From 6 April 2020: £4,304  (eight weeks’ pay capped at the statutory amount)

    • For more details, see The Employment Rights (Increase of Limits) Order 2019

Family friendly payments: -

Compensation limits

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  • Statutory maternity pay (SMP):

    • First six weeks – 90 per cent of employee’s average weekly earnings. Remaining weeks at the following rates.

    • From 7 April 2019: £148.68 or 90 per cent of employee’s weekly earnings if this is lower.

    • From 5 April 2020: £151.20 or 90 per cent of employee’s weekly earnings if this is lower.

  • Statutory adoption pay (SAP):

    • First six weeks – 90 per cent of employee’s average weekly earnings. Remaining weeks at the following rates.

    • From 7 April 2019: £148.68 or 90 per cent of employee’s weekly earnings if this is lower.

    • From 7 April 2019: £151.20 or 90 per cent of employee’s weekly earnings if this is lower.

  • Statutory paternity pay (SPP):

    • Paid for two weeks.

    • From 7 April 2019: £148.68 or 90 per cent of employee’s weekly earnings if this is lower.

    • From 5 April 2019: £151.20 or 90 per cent of employee’s weekly earnings if this is lower.

  • Statutory shared parental leave pay:

    • From 7 April 2019: £148.68 or 90 per cent of employee’s weekly earnings if this is lower.

    • From 5 April 2020: £151.20 or 90 per cent of employee’s weekly earnings if this is lower.

  • Statutory Sick Pay:

    • From 6 April 2019:​ £94.25

    • From 6 April 2020: £95.85

  • National Living Wage and National Minimum Wage: - From 1 April 2020:

    • Workers aged 25 and over: £8.72 an hour (National Living Wage)

    • Workers aged 21-24: £8.20 an hour

    • Development rate for workers aged 18-20: £6.45 an hour

    • Young workers rate for workers aged 16-17: £4.55 an hour

    • Apprentice rate: £4.15 an hour

  • Businesses should review their employee handbooks to ensure their policies and procedures are up to date to reflect the changes.  Teams and employees should be aware of holiday entitlement, sick leave, maximum working hours and more.  If you would like any support or guidance, we are only a phone call away.