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Summary of Employment Regulation Changes

March 2020

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.

Please click here for full details: IR35 Reform

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.

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