Sejal Raja considers key employment law changes which come into effect in 2020.
Right to a written statement of terms – change effective from 6 April 2020
Currently employers are required to provide employees who have been continuously employed for more than one month written statement of terms within two months of the employment commencing.
From 6 April 2020, employers are required to provide all new employees and workers with a written statement of particulars from their first day of employment. Additional information will have to be included as part of the extended right, which includes:
- how long the employment is expected to last, or the end date of a fixed-term contract
- how much notice the parties are required to give to terminate the agreement
- details of eligibility for sick leave and pay
- the duration and conditions of any probationary period
- the normal working hours, the days of the week the worker is required to work, and any variation
- any training entitlement provided by the employer.
Given the new obligation is to provide particulars on ‘day one’, employers should review their contracts and revisit recruitment processes to ensure that they comply with the provision of the information on the day an employee or worker starts work. Employers will need to consider who might qualify as a worker, as this requirement also applies to workers. Please contact us if you would like us to review your contracts of employment.
Changes to IR35 rules for the private sector – change effective from 6 April 2020
Currently, the IR35 rules apply where an individual (worker) provides services personally for another person (client), through a personal service company (PSC). If the services were provided under a direct contract, the worker would be regarded for tax purposes as employed by the client. Currently, it is the PSC’s responsibility to determine whether IR35 applies.
From 6 April 2020, the changes which will impact medium and large businesses in the private sector will mean that for all contracts entered into, or payments made on or after 6 April 2020, the end user client will need to determine whether IR35 applies, and if the end user pays for the individual’s services, it will have to account for tax and NI.
It is important that medium to large businesses that work with contractors undertake an assessment to determine whether the new rules under IR35 apply to their independent contractors. They should also review their contracts and pay arrangements to consider whether the individuals are caught within the IR35 legislation. Small businesses will not be affected by the changes. We are holding a webinar to consider employment status and consider recent case law in this difficult area on Thursday 13 February. Details will be published shortly.
Holiday pay reference period adjustment – change effective from 6 April 2020
There has been recent case law in determining the calculation of holidays, which can be complicated particularly for those individuals who work variable hours and variable rates of remuneration. Currently the holiday pay reference period is 12 weeks, i.e. employers can look back to the last 12 weeks to calculate holiday pay. From 6 April 2020, the reference period will increase from 12 weeks to 52 weeks. Employers will be required to look back at the previous 52 weeks where a worker has worked and received pay. Any weeks not worked or where no pay was received is not taken into account when calculating the average weekly pay. This will make the calculation fairer particularly for those undertaking seasonal roles.
New parental bereavement law – proposed implementation date 6 April 2020
It is anticipated that the Parental Bereavement (Leave and Pay) Act 2018 will come into force in April 2020. This will provide bereaved parents with the right to two weeks of leave following the loss of child under the age of 18, or a stillbirth after 24 weeks of pregnancy. Further details are awaited but bereaved parents will be entitled to take their leave in one two-week block or in two separate blocks of one week. Bereaved parents employed with a minimum of 26 weeks’ continuous service will also be entitled to receive statutory parental bereavement pay. Those with less than 26 weeks’ continuous service will be entitled to take two weeks of unpaid leave. We will provide a further update once we have confirmation that this piece of legislation will be coming into force and guidance on how to prepare business for this new legislation.
National Minimum Wage – Change effective from 6 April 2020
And finally, the Government has announced increases to the National Minimum Wage rates which are as follows:
- The National Living Wage for ages 25 and above – up 6.2% to £8.72
- The National Minimum Wage for 21 to 24-year-olds – up 6.5% to £8.20
- For 18 to 20-year-olds – up 4.9% to £6.45
- For under-18s – up 4.6% to £4.55
- For apprentices – up 6.4% to £4.15