2020 brings with it 5 key changes to employment law that will impact both employers and employees – make sure you are ready for when many of the changes come in force on 6 April 2020 by taking advice now.
1. New right to a written statement of terms
Employees who’ve been employed more than one month must be given a written statement of the terms upon which they are employed within 2 months of starting work.
All employees AND workers will have a right to a statement of written particulars of employment on the very first day of work.
Employers need to consider whether they want to recruit workers or employees and should prepare the statement of particulars of employment during the recruitment stage to be able to supply this on day one. They should review current contracts and recruitment policy to ensure everything is in place for new starters and be prepared for when existing staff request a statement.
2. Changes to Holiday pay calculations
Complicated calculations for those working variable hours or earning a variable wage, using the previous 12 weeks as a reference period to work out a ‘week’s pay’.
To even out variations the new reference period will increase to the previous 52 weeks (or number of complete weeks worked if less than a 52) discarding any weeks not worked or where no pay was received.
Employers need to consider who this new reference period will be relevant to and have systems in place ready to implement the new rules, particularly as the change falls at just before the Easter holidays when many will want to take leave. The rules come in force from April 2020 but employers will need to ensure records from the previous year are up to date and ensure data is accurately recorded going forward.
3. Parental bereavement leave
There is currently no law giving parents the right to time off in such circumstances.
The Parental Bereavement Leave and Pay Act 2018 is expected to come into force in April to give 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 and to claim pay for this period (subject to eligibility criteria).
Employers should communicate the change to staff ideally by way of written policy but should be alert to potential race or religious discrimination and avoid applying a blanket policy given different religious and cultural approaches to bereavement.
Employers should be aware of bereaved mother’s existing rights to maternity leave, which is not lost if a child it lost after 24 weeks of pregnancy.
Finally, employers need to be mindful of the long term affect such a loss can have and deal with performance issues and absence requests carefully.
4. Changes to Agency Workers Rules
Agency workers are already entitled to the same pay & basic working conditions as direct recruits once they’ve completed 12 weeks’ continuous service in the same role BUT the ‘Swedish Derogation’ provides an exemption to this right if the worker is employed directly by the agency under a permanent contract rather than the agency acting as a middle man.
The Swedish Derogation employment model is being abolished. Agency workers will not be able to enter contracts with Agencies that remove their rights and will be entitled to the same pay as those on permanent contract directly with the employer after 12 weeks of service. Further, agencies will have to provide agency workers with a ‘Key Information Document’ detailing the type of contract, the minimum expected pay, how they will be paid and by whom.
Employers should consider the additional costs to business arising out of the enhanced rights and before 30 April 2020 agencies will have to inform any workers whose existing contracts contain a Swedish Derogation provision that it will no longer have effect.
5. Changes to IR35 (tax evasion) rules for the private sector
IR35 is a law that allows HMRC to collect an additional payment where a contractor is an employee in all but name (i.e. a contractor may technically be performing work for an end client via an intermediary like a limited company but if it were not for that intermediary they would be an employee of the end client and should be treated as such for tax purposes).
It is the intermediary’s/middle man’s responsibility to determine whether IR35 applies.
The new off-payroll rules will require medium and large businesses who engage contractors to assess the employment status of those workers i.e. shifting the onus onto the end client rather than the middle man.
Medium and large sized businesses should review their current workforce and consider who the new rules may apply to, speak to their contractors and put new systems in place to determine if the rules will apply to future relationships. The Government ‘Check Employment Status for Tax’ service is available online.
How can we help?
The main thing you can do to prepare and comply is to review and keep reviewing, your workforce, working practices and contracts.
If you would like advice or assistance on compliance with employment law, please get in touch to discuss how we can help you.