A number of significant changes in employment law are due to take effect in
April.
The main legal developments are as follows:
Increase in National Minimum Wage
As of 1 April 2020, the rate of the national living wage, the hourly rate
for workers who are aged 25 and over, increases from £8.21 to £8.72. The
National Minimum Wage for workers aged at least 21 but under 25 rises from
£7.70 to £8.20 per hour. The rate for workers who are aged at least 18 but
under 21 increases from £6.15 to £6.45 per hour; the rate for workers aged
16 or 17 rises from £4.35 to £4.55 per hour; and the apprentice rate rises
from £3.90 to £4.15 per hour.
The accommodation offset increases from £7.55 to £8.20 per day. The
accommodation offset is the limit to the amount that an employer providing
accommodation can count towards the National Minimum Wage.
Increase in Statutory Maternity Pay and other family-related statutory pay rates
From 5 April 2020, the rates of Statutory Maternity Pay, Statutory
Paternity Pay, Statutory Adoption Pay and Statutory Shared Parental Pay
increase from £148.68 to £151.20 per week.
The reform to intermediaries legislation (IR35) extended to private sector is postponed for one year.
It was expected that the rules on off-payroll working in the private sector would be amended as of 6 April 2020, with the end-client becoming responsible
for determining the IR35 status of a contract with a Personal Service
Company.
There was also intended to be a small business exemption to these rules meaning that the
end-client would be exempt from these rules when:
· Annual turnover is no more than £10.2 million
· Balance sheet total is no more than £5.1 million
· There are no more than 50 employees
However, all these changes have now been postponed until 6th April 2021.
Increase in holiday reference period from 12 weeks to 52 weeks
Holiday pay for staff who do not have fixed hours or pay i.e. zero hours or
casual staff, must be based on ‘normal remuneration’, rather than
contracted hours.
From 6 April 2020, the reference period used for determining a week's pay
when calculating holiday pay for workers with irregular hours will increase
from 12 weeks to 52 weeks.
Increase in Statutory Sick Pay rates
As of 6 April 2020, SSP increases from £94.25 to £95.85 per week.
Removal of the ‘Swedish derogation’ principle (agency workers)
With effect from 6 April 2020, the ‘Swedish derogation’ principle (which
currently allows employers to avoid pay parity (after 12 weeks) between
agency workers and a company’s direct employees if certain conditions are
met) will be abolished. This change is intended to stop agency workers
losing out on their equal pay rights.
Introduction of parental bereavement leave rights
As of 6 April 2020, employees will be allowed at least two weeks' leave
following the loss of a child under the age of 18 or a stillbirth after 24
weeks of pregnancy.
Employees with 26 weeks' continuous service will be entitled to two weeks
of paid leave at the statutory rate and other employees will be entitled to
unpaid leave.
Extension of the right to a written statement to all workers
The right to a written statement will be a day one right for all workers
(including employees). Employers will also have to provide additional
information for a written statement for new joiners.
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific
legal matter.