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The 2020 Employment Law changes you need to plan for

There are a number of changes to employment legislation coming into play in April 2020, some of these changes have resulted from the government’s Good Work Plan which was published in December 2018.

Here are the key changes you need to be aware of, and how they will impact your business:

How you calculate holiday pay for employees with variable working hours

The government is extending the reference period for determining an average weeks’ pay, from 12 weeks to 52 weeks, from the 6 April 2020. This reform is intended to help employers calculate a more accurate average, and improve holiday pay for seasonal workers, who may lose out based on the current calculation.

It will be important to keep records of employee’s pay for the 52 weeks prior to 6 April 2020, and continue to do so. It will also be important to consider how and when to make the change within your business. For example, if your holiday year starts in January, you may wish to consider whether to implement the change from January in line with your holiday year, or wait until April.

Given the extensive amount of case law decisions over previous years around the calculation of holiday pay and what should be included, we advise you take the opportunity to review your working practices within this area and seek advice to ensure you are complying with the current guidelines.

Rules around who should receive a ‘written statement of particulars’ and what should be included will be extended

Currently employers have up to two months to issue a written statement of particulars, which is essentially basic terms of employment, to any employee working for them for more than one month.

From April 6 2020, both workers and employees will be entitled to receive a written statement of particulars. Also, employers will be required to provide these particulars from day one.

The statement will be extended to include the following additional particulars in relation to;

  • The days of the week the individual is required to work, whether working hours are or could be variable and how any variation will be determined
  • Details in relation to ‘any other’ paid leave entitlement in addition to holidays
  • Details around any probationary period, including length and any conditions
  • Details in relation to any other benefits provided by the employer (i.e. not just pay)
  • Any training entitlement provided by the employer, including if this is mandatory and/or must be paid for by the individual

These changes should be implemented in relation to anyone starting work on or after April 6 2020.

We suggest you take the opportunity to review and update your employee documentation, and create or update documentation for any workers you engage with in preparation for these changes. It would also be beneficial to review your recruitment and induction process to ensure they reflect the above changes.

Extension of IR35 to the private sector

The off-payroll working rules, also known as IR35, can apply if a worker provides their services through an intermediary, but would be classed as an employee if they were contracted directly.

These rules are aimed at reducing tax avoidance for off-payroll contractors working through personal service companies. Currently, only public sector companies are responsible for deciding whether the off-payroll working rule (IR35) applies and for deducting the relevant tax and NI contributions from the contractor’s fee when it does not.

From April 6 2020, medium and large-sized private sector clients will also be responsible for deciding if IR35 applies.

If IR35 applies, all payments made to personal service companies will be treated as payments of employment income on which the client (or a third-party intermediary) must account for tax. This shifts responsibility for IR35 tax compliance from the personal service company to the client or intermediary.

The HMRC has issued guidance on this and how to prepare ahead of the changes. This will include looking more closely at the employment status of individuals.

The introduction of Parental Bereavement Leave

Parental Bereavement Leave will entitle employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, to two weeks leave, to grieve away from the workplace. This will be a day one right, so there is no minimum service requirement.

The government has announced that Parental Bereavement Leave and pay will be available to be taken as a single block, or as two separate weeks, and that employed parents will have a period of 56 weeks in which to use their entitlement. The government is expected to lay the regulations before parliament by the end of this year. The regulations are expected to come in to force in April 2020.

In preparation for the introduction of this new statutory right, employers should consider having a written bereavement policy in place. It is also important to be aware that mothers who lose a child after 24 weeks of pregnancy or during maternity leave will not lose their entitlement to maternity leave and pay.

Agency workers opt out loophole will be removed

Current rules governing agency workers allow agencies to opt out of equalising the pay of agency staff with the permanent workforce when they have been with the same employer for more than 12 weeks, provided they pay the agency worker between assignments. This will cease on April 6 2020 when the Agency Workers (Amendment) Regulations 2019 come into force.

What to do next?

With lots of changes effecting employment law, it is important to ensure you remain ahead, keep your documentation up to date and seek specific advice as to how the changes impact your business. Our team of specialist employment law consultants are on hand to provide support to you and your business.

 

Sources:

Gov.uk/government/publications/good-work-plan
Gov.uk/guidance/understanding-off-payroll-working-ir35
Gov.uk/government/publications/off-payroll-working-in-the-private-sector-ir35-budget-2018-brief
Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018
Employment Rights (Miscellaneous Amendments) Regulations 2019
Agency Workers (Amendment) Regulations 2019
Parental Bereavement (Leave and Pay) Bill


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Rachel Thompson
Rachel heads up our employment law division at Jelf. Rachel has a wealth of experience within employment law and provides commercially focused employment law solutions to clients of various sizes and industries. Rachel has her Masters Degree in Law and has completed her post graduate Diploma in Legal Practice.