Key employment law changes coming in to force on 6 April 2020
Further to our update at the beginning of the year, there are a key number of changes coming in to force on 6 April 2020 including legislation under the Good work plan.
All termination payments above the £30,000 threshold will be subject to class 1A NICs. If you are negotiating a settlement agreement or exit package this is something that both parties will need to consider as it places obligations on the employer and may result in a smaller financial sum for the employee.
Statement of terms for all workers
All workers, not just employees, will be entitled to a written statement of terms of employment from day one of their employment (or before), rather than within two months of starting. This information must also now include: details of all remuneration and benefits; any paid leave the worker is entitled to; any probationary period; the hours and days of the week the worker is required to work; and details of any training provided by the employer.
Changes to holiday pay calculations
The reference period to calculate a ‘week’s pay’ for those who do not have normal working hours or those whose pay varies will be extended from 12 to 52 weeks. If an employee has worked for less than 52 weeks then the reference period will be the number of weeks the employee has worked.
Changes to agency worker contracts
Employment businesses must provide agency work-seekers with a key information document before the terms under which they will work are agreed. The information to be given includes: minimum rate of pay; any deductions to that pay, how they will be paid and by whom; and annual leave entitlement.
The “Swedish Derogation” provision that appears in many agency workers’ contracts (which enabled businesses to opt out of equal pay requirements) will no longer apply. Temporary work agencies must advise workers of this in writing by 30 April 2020.
Statutory Parental Bereavement PayA new statutory right will apply from 6 April 2020 which entitles employees to take one or two weeks off work following the death of a child under 18 or a stillbirth. A new statutory payment, statutory parental bereavement pay, may be payable during parental bereavement leave, this will depend on the individual’s length of service and earnings.
Statutory Sick Pay and Family Related Pay
The statutory sick pay rate will increase from £94.25 to £95.85 and the statutory rate of maternity pay, paternity pay, adoption pay, and shared parental pay will increase from £148.68 per week to £151.20.
National Minimum Wage and National Living Wage
As of 1 April 2020, National Living Wage increased from £8.21 to £8.72 per hour for those aged 25 and over.
National Minimum wage increased as follows;
• For 21 to 24 year old the rate increased from £7.70 per hour to £8.20 per hour
• For 18 to 20 year old rate increased from £6.15 per hour to £6.45 per hour
• For 16 to 17 year old rate increased from £4.35 per hour to £4.55 per hour
We are likely to see further developments as the year progresses and as a result of the current Covid-19 pandemic, but you can put yourself in the best position by taking steps now to ensure you have the correct documentation and processes in place. We can do the hard work of reviewing and updating your contracts and policies, so get in touch and we would be happy to discuss how we can help you.