Ethnicity pay gap reporting
In October 2018, the Government launched a consultation on the introduction of mandatory ethnicity pay gap reporting, as a means of removing the barriers to workplace progression faced by ethnic minorities. The consultation proposes that the requirement to report would apply to employers with 250 or more employees, thus mirroring existing gender pay reporting requirements (see below). In the consultation paper, the Government considers the challenges of gathering ethnicity data and the implications of various possible methods of reporting ethnicity pay information.
The consultation closes on 11 January, and EEF’s response – compiled based on feedback from our members – will be published shortly.
Gender pay gap reporting (year 2)
There was plenty of media attention surrounding the publication of companies’ first statutory gender pay gap reports last year. In total, 10,252 employers reported their gender pay gap, and 1,456 were late in doing so. Indeed, whether due to difficulties crunching the numbers or a fear of being the first to put their figures out there, 87% of in-scope companies (i.e. those with 250 or more employees) reported in the last 30 days before the 4 April 2018 deadline and 48% reported in the final week. As well as the last-minute nature of many companies’ reports, questions were raised in the press about the accuracy of the published reports, and the Equality and Human Rights Commission stated its intention to follow up with employers whose published figures appeared "statistically improbable".
The deadline for this year’s gender pay gap reports is 4 April and, as this year’s figures will be scrutinised against those in the previous year’s reports, there is perhaps even more at stake this year. Companies that are currently gathering their payroll data and scratching their heads over the calculations will be hoping that the results show a narrowing, rather than a widening, of their gender pay gap. And for those companies where the gap has not narrowed, the crafting of appropriate communications to employees and an explanatory narrative to accompany this year’s published report will be especially important to minimise any employee relations issues and negative publicity.
If you are concerned about how to prepare and present this year’s report, book a place on our February seminar, Gender pay gap reporting: lessons learned and next steps. The session will provide a refresher on how to comply with the law on gender pay, consideration of lessons learned from initial gender pay reporting and guidance on the steps you could take to narrow your gender pay gap, together with the communications around this.
Another issue to hit the headlines in 2018 was data protection, with the entry into force of the GDPR and the Data Protection Act 2018 (DPA 2018) in May and numerous high profile data breaches across the year. Given this, employers could be forgiven for having a bit of GDPR fatigue, but prioritising and ensuring effective data security will only increase in importance in 2019, as the Information Commissioner’s Office has made clear that it will take GDPR enforcement extremely seriously going forwards and that fines for data breaches are likely to be "significantly higher" in the future. In addition, as employees become more aware of their rights under the GDPR, employers may well experience a sharp rise in the number of individual rights requests they receive, including Subject Access Requests (SARs).
Our hugely popular GDPR seminar series continues throughout January 2019. The latest instalment takes an in-depth look at SARs and other individual rights requests and will provide step-by-step guidance to give you the tools and confidence you need to respond to such requests. The session also calls upon EEF’s practical experience of assisting companies faced with a GDPR personal data breach, so you can be pro-active in dealing with such a scenario. In addition, we explain how the GDPR and DPA 2018 will affect certain everyday HR activities. Click here to book your place.
When considering what’s to come in 2019, it’s impossible to ignore the "B-word". On 29 March 2019, the UK is set to leave the European Union and, at the time of writing, the risk of a "no deal" exit seems to be increasing.
Whatever the terms of our exit, there is unlikely to be much immediate impact on UK employment law, as the European Union (Withdrawal) Act 2018 provides for existing EU laws to be brought directly into UK law to ensure continuity. In addition, the Government has said that changes to employment legislation in the event of "no deal" will not change substantive employment rights.
The more significant concern for employers in the short to medium term will be in relation to their EU workers. The "settled status" scheme designed by the Government will allow EU citizens and their families who arrive in the UK before a specified date to remain here and retain their right to work (the relevant date is 31 December 2020 if a Brexit deal is confirmed, or 29 March 2019 in the event of a "no deal" exit). We recommend that employers audit their current workers to establish how many of them are here from the EU and how long they have been here, as this will enable employers to offer appropriate support to workers needing to apply for settled status and put themselves in the best position to respond to the workforce challenges of Brexit. EEF’s Migration Toolkit provides easy to understand guides for companies so they can future proof their workforce as the UK plans to leave the EU. Use our self-audit migration tool to determine if and when your EU workers can achieve settled status. Click here to access the Toolkit. We will also be running a series of seminars in February covering this topic. Click here for more information.
Increased rates of statutory pay
The rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will go up to £148.68 per week from April 2019. The increase normally occurs on the first Sunday in April, which in 2019 is 7 April. (Note that, for statutory maternity pay and statutory adoption pay, the first six weeks are payable at the "earnings-related rate", i.e. 90% of the employee’s normal weekly earnings, and the remaining 33 weeks are payable at the statutory rate or the earnings-related rate, whichever is lower. Statutory paternity pay and statutory shared parental pay are both payable at the lower of the statutory rate and the earnings-related rate.)
The rate of statutory sick pay will increase to £94.25 per week, from £92.05. This increase is expected to occur on 6 April 2019.
To be entitled to the above statutory payments, employees’ average earnings must be equal to or more than the lower earnings limit. The lower earnings limit is increasing to £118 from April 2019 (from its current rate of £116).
The various rates of the national minimum wage are also due to increase in April 2019. The National Living Wage (NLW), the statutory minimum for workers aged 25 and over, will increase by 4.9% to £8.21 per hour. The rate for workers aged 21 to 24 will increase to £7.70 per hour (an increase of 4.3%) and the rate for workers aged 18 to 20 will increase to £6.15 per hour (a 4.2% rise). The rate for young workers aged 16 to 17 will rise to £4.35 per hour (an increase of 3.6%), but the greatest percentage increase will be in the apprentice rate, which will rise by 5.4%, to £3.90 per hour.
Increased contribution rates for auto-enrolment pensions
On 6 April 2019, minimum contributions into a workplace pension will rise to a total contribution of 8% of qualifying earnings, from the current requirement of 5% of qualifying earnings (the qualifying earnings band for the 2019/20 tax year is expected to be £6,136 - £50,000). The maximum amount that employers will be able to require a worker to contribute is 5% of qualifying earnings (as compared with 3% at present). For employers who have used certification, contribution rates are modified, but there will still be corresponding incremental increases in the applicable contribution rates.
Right to itemised pay statement
From 6 April 2019, all workers will have the right to receive an itemised pay statement and will be able to bring claims in the employment tribunal to enforce that right. For workers who are paid hourly, the pay statement must specify the number of hours paid for.
Parental bereavement leave
In November 2018, the Government published its response to a consultation on the introduction of statutory parental bereavement leave and pay. The main laws introducing this right have already been enacted, but further regulations are required to set out the detail of how it will operate, and it was that detail that the consultation sought to address.
All employed parents will have a statutory right to two weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. Employed parents who meet the relevant eligibility criteria will also be able to claim statutory parental bereavement pay for this period. The eligibility criteria are similar to those that apply to statutory paternity pay.
The consultation response confirms that leave will be available in a single block of two weeks, or in two separate one-week blocks, and will have to be taken within 56 weeks of the child’s death. Parents will not have to provide advance notice to take leave in the period immediately following the child’s death, but will be required to give at least one week’s notice to take leave after that initial period. Parents wishing to claim statutory parental bereavement pay will need to provide a written declaration of their entitlement, in much the same way as for other types of statutory family leave pay.
Regulations are expected to be published during 2019 and to come into force in 2020.
Taylor Review response - the "Good work plan"
In December 2018, the Government published its "Good work plan" in response to the Taylor Review of modern working practices. The measures put forward in the plan include:
- extending the right to a written statement of terms and conditions to workers (it is currently restricted to employees) and providing for the right to apply from day one (employers currently have up to two months to provide the statement)
- (in those cases where a reference period and averaging calculation is required) increasing the reference period for calculating a week’s pay for holiday pay purposes to 52 weeks (the relevant reference period is currently 12 weeks)
- repealing the provision of the Agency Workers Regulations known as the 'Swedish derogation', which allows employers to pay agency workers less than permanent employees in certain circumstances
- amending the Employment Rights Act to allow for a gap of up to four weeks between contracts without breaking continuity of employment (currently a gap of more than one week will break continuity)
- providing workers on zero (or variable) hours contracts with the right to request a more fixed working pattern after 26 weeks' service
legislating to clarify the employment status tests and align the employment and tax status frameworks
While the above changes will certainly be significant, there is no immediate action for employers to take. Draft legislation dealing with the first three bullet points has already been published, but is not expected to come into force until 6 April 2020. The clarification of the employment status tests, in particular, may prove complicated and any draft legislation is likely to be some time in the making.
So, how can EEF help?
As it stands, 2019 is already shaping up to be quite a busy year from an employment law perspective, and there are likely to be plenty of other issues that crop up in the months ahead. As ever, EEF are here to help our members navigate the compliance challenges thrown up by new legal developments.
We will continue to update you throughout the year, and keep you on top of the ever evolving HR and employment law agenda. Dates for our popular Spring Employment Law Update will be released soon.
We are also offering an employment law ‘spring clean’ to help you ensure that your handbook, policies and procedures are up-to-date and compliant as we head into 2019.
For more information on how we can help, call our HR team on 0808 168 5874 or email [email protected].