18th March 2020

Key employment law changes

There are a number of key legislative changes which will be coming into force from 6 April 2020 which employers should not only be aware of but should also start preparing for. The key changes are:

Terms and conditions of employment

Currently, new employees have the right to a written statement of key terms within two months of starting employment. On or after 6 April 2020 all employees (including all workers) starting work will be entitled to receive a written statement of key terms on or before they start. Additional information will also need to be included such as training entitlement provided by the employer and details of any benefits the employee will receive.

As an employer, you should be reviewing your template contracts of employment so that you are ready and complaint when the legislation comes into force.

Holiday pay

The 12-week reference period for calculating holiday pay will change to a 52-week reference period.

The rationale behind this change is to ensure that those with variable hours are not disadvantaged by taking holiday at a quieter time of the year and their holiday pay being much less than if they took it after a different and busier time of the year.

Parental bereavement leave and pay

Employees who have lost a child under the age of 18 or have suffered a stillbirth after 24 weeks of pregnancy will be entitled to two weeks’ parental bereavement leave. This is a ‘day one’ right for employees without any period of qualifying service. Employees with at least 26 weeks’ continuous service will be entitled to two weeks Statutory Parental Bereavement Pay which will be calculated at the same rate as Statutory Paternity Pay.

Termination payments

All termination payments above £30,000 will be subject to not only income tax but will additionally become subject to employer’s NICs only (not employee NICs).

Agency workers

All agency workers will have the right to pay parity as direct employees after 12 weeks of service. The current Swedish derogation rule which allows for differences in pay will be removed from the Agency Workers Regulations 2010.

IR35 (now 2021)

It has been announced by the government that the extension of the IR35 rules to medium and large companies in the private sector is being postponed until 6 April 2021.

This announcement was made as an additional measure to support both businesses and individuals in dealing with the economic impacts of Coronavirus.

As a result, the current rules continue to apply for private sector organisations i.e. the onus is placed on the personal service company to self-assess whether IR35 applies and if an individual worker is a ‘deemed employee’ for that purpose until 6 April 2021.

All other employment law changes detailed above will still come into affect as planned on 6 April 2020.

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