Whilst the Government set out its longer-term legislative plans in the Queen’s Speech on 18 December 2019, here we take a look at key legislative changes relevant to HR that are due to be implemented in April 2020.
More information on the employment aspects of the Queen’s Speech can be found here.
New section 1 statement requirements
The right to a written statement of terms under section 1 of the Employment Rights Act is being extended. As a result, all employers will need to make changes to the content of their section 1 statements.
Individuals who commence employment on or after 6 April 2020 will be entitled to the following additional information in their section 1 statement of terms:
- the days of the week they are required to work;
- whether the working hours may be variable and how any variation will be determined;
- any paid leave to which they are entitled;
- details of all remuneration and benefits;
- any probationary period; and
- any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the individual.
There is less scope for referring out to other documentation under the new rules. The timetable for providing this information to your new starters will also change: the section 1 statement must be provided by the date that the individual starts employment with you, rather than within two months of their start date.
Another significant change is that, from 6 April 2020, workers (not just employees) will be entitled to a section 1 statement containing similar information.
Note that you do not have to reissue section 1 statements to your existing employees on 6 April 2020, unless they request it either during their employment or within three months of termination. If they do request it, you will have one month to provide a compliant ‘new style’ section 1 statement. However, if you change a mandatory term of either a new or old style section 1 statement, you will need to update the individual of the change in writing (even if you were not required to include the term in the individual’s original section 1 statement because they had started work with you before 6 April 2020).
Make UK members can click here for more information about the new requirements. We can support you with the drafting and implementation of these changes across your workforce. If you would like to speak to us regarding your requirements please contact our HR team by calling 0808 168 5874, or email us.
Increases to the national minimum wage (NMW) and national living wage (NLW)
- The NLW for workers aged 25 and over will increase from £8.21 to £8.72 per hour
- The NMW for 21-24 year olds will increase from £7.70 to £8.20 per hour
- The NMW for 18-20 year olds will increase from £6.15 to £6.45 per hour
- The NMW for 16-17 year olds will increase from £4.35 to £4.55 per hour
- The apprentice rate for those aged under 19 or in their first year of an apprenticeship will increase from £3.90 to £4.15 per hour
The Government has also announced plans to expand the NLW to cover workers aged 23 and over from April 2021 and those aged 21 and over within 5 years. The NLW is expected to rise to around £10.50 an hour by 2024, if economic circumstances allow.
IR35/off payroll working rules extended
The Government has recently launched a review of the proposed changes (which is due to conclude in mid-February) to address any concerns from businesses and affected individuals about how the reforms will be implemented. The review will consider whether further steps can be taken to ensure the reforms take effect smoothly, including whether any additional support is needed for the self-employed. We will keep you updated on developments. In the meantime, to find out how Make UK can support your business and help you to prepare, click here. Responding to demand, we have added new dates for our IR35 workshop: how to prepare for the new rules and assess your risk in January and February. For more information and to book your place, click here.
Longer reference periods for holiday pay calculations
This change is intended to remove the disadvantage that some workers who have variable working patterns may face if they take their holiday at a quiet time of year when their average weekly pay might otherwise be lower, for example those whose working hours vary seasonally.
Removal of Swedish derogation from the Agency Workers Regulations
The Agency Workers Regulations include an exemption from the principle of equal treatment as regards pay where an agency worker has a permanent employment contract with the agency and is paid between assignments when they are not working for a hirer. This is known as the ‘Swedish derogation’ or a ‘pay between assignments’ contract. From 6 April 2020, this exemption will be removed and agency workers on pay between assignments contracts will be entitled to the same pay as other agency workers.
On or before 30 April 2020, agencies must provide agency workers on pay between assignments contracts with written confirmation stating that those provisions exempting them from equal treatment as regards pay will no longer apply from 6 April 2020. If you use agency workers who are on pay between assignments contracts, we recommend that you check your contract with the agency and engage with them now about the implications of this change, for example on the cost of agency workers.
Lower numbers required to trigger Information and Consultation (I & C) Agreement negotiations
Currently, if at least 10% of the employees in an undertaking with 50 or more employees submit a written request, the employer must negotiate with employee representatives to put in place an I &C agreement. This is subject to a minimum of 15 and a maximum of 2,500 employees making a request.
The Government believes that high levels of employee engagement improve organisational performance and productivity, and lead to more fulfilling work. So, from 6 April 2020, the 10% threshold will be reduced to 2% (and as a result employers will need to begin negotiations on receipt of a valid request from at least 2% of the workforce, although the current 15 employee minimum threshold will remain).
National Insurance Contributions (NICS) payable on termination payments above £30,000
From 6 April 2020, all termination payments above the £30,000 threshold will be subject to class 1A employer NICs, to bring the NICs position into line with that of income tax. This measure was initially expected in April 2018, but has been delayed twice. (Note that these payments will remain free from employee NICs.)
Parental Bereavement Leave and Pay
If you would like guidance on preparing policies in relation to any family rights in the workplace (e.g. maternity, paternity, adoption or parental leave and pay obligations) please click here to contact one of our HR consultants who can provide further assistance.
Make UK members can also download a number of templates, forms, and other helpful tools relating to family rights and flexible working by clicking here.
How Make UK can help
We will keep you updated on changes to the law, developments relating to Brexit and new case law via the Make UK website, as well as seminars, webinars, workshops and in-plant training throughout the year.
For day-to-day employment matters, Make UK members have access to our bank of online legal documents and templates. In addition, our advisers are available to provide Make UK members with specialist guidance on HR and legal issues as they arise. Our HR consultants can also support your business in many ways, click here to find out more.