Employment Update: Key Changes for 2020

New rules on written particulars of employment

From 6 April 2020, employers must provide a written statement of employment particulars to all workers, not just to those that are considered employees.  From 6 April 2020, this statement must be provided to all employees prior to the commencement of employment and not within the 2 months’ grace period currently allowed.  The information that must be provided within the statement must now include extra information on the days of the week a worker is required to work an how variable working hours may be determined, paid leave (other than sick pay), e.g. maternity and paid leave, benefits, details of any probationary period and any mandatory training that is required.

Existing employees will have the right to request a statement that is compliant with the new rules.  If a request is made, it must be provided within one week.

There is no free standing remedy for non-compliance, or for not providing complete information.  However, if an employee brings another substantive claim and succeeds, an additional award of compensation can be made for 2 to 4 weeks’ pay (capped at the same level as redundancy pay).

What action should you take? 

You need to review the terms and conditions of employment that you currently provide to the workforce and identify which roles will be subject to these new requirements after 6 April 2020.  You will need to ascertain whether your standard contracts, employment particulars, incorporate all of the additional required information and amend as appropriate.

You will need to ascertain whether you engage workers, not currently subject to the requirement to provide written particulars of employment.  You will need to prepare a bespoke document for these individuals to ensure that any non-employment status is not undermined by the new document provided.

New legislation requires you to provide full details of all benefits provided.  You will need to identify what benefits are provided to your workers.

Harding Evans Solicitors can assist, both with this audit and in updating your terms and conditions of employment.

Taxation of termination payments

This will be particularly relevant to senior management terminations.  Currently, the first £30,000 of a termination payment (other than taxable notice pay) can be paid without deduction of income tax or national insurance contributions.  Up to 6 April 2020, the amount over £30,000 is subject to income tax but not NICs.  From 6 April 2020, any payments in excess of £30,000 will be subject to employer’s NICs (albeit not employee NICs).

Significant increase in the National Minimum Wage

Most employers are probably aware of the relatively significant increases in the minimum wage from 1 April 2020.  The National Living Wage, for older workers aged 25 and above, will increase from £8.21 to £8.72 per hour, a rise in excess of 6%.  The rates for younger workers will also increase with hourly rates rising to £8.20 for workers aged at least 21 and £6.45 for workers aged at least 18 but under 21.  For workers aged under 18, who are no longer of compulsory school age, the rate is £4.55 and the rate for apprentices will be £4.15.

These significant increases in the lowest rates of wages may also have an impact on wages for employees previously paid above the minimum wage due to the narrowing of differentials.

Parental Bereavement Leave – “Jack’s Law”

The Parental Bereavement Leave Regulations 2020 and the Statutory Parental Bereavement Pay (General) Regulations 2020 will come into force on 6 April 2020.

Employees who are parents will be entitled to a statutory minimum of two weeks’ parental bereavement leave following the death of a child. This right will apply to all employed parents who lose a child under the age of 18, or suffer a stillbirth (from 24 weeks of pregnancy), regardless of their length of service. The leave may be taken as a single block or as two separate blocks of one week and may be taken at any time in the period of 56 weeks after the child’s death.

Parents with 6 months’ continuous service with their employer and weekly average earnings over the lower earnings limit will also be entitled to Statutory Parental Bereavement Pay paid at the statutory rate of £151.20 per week or 90% of average weekly earnings where this is lower. This rate will update in line with other statutory payments such as the basic rate of statutory maternity pay.

IR35 Rules

Please see the link to our previous updates on the New IR35 Rules.  Employers should now be increasing considering how they put in place processes to ensure that they make proper status determinations for those contractors supplying services through a limited company, whether directly or through an agency.  For more details, click here.