April is always a key time for employers as the Government introduces a raft of changes to annual pay rates and looks ahead to upcoming proposals for reform.
Increase in the National Living Wage and National Minimum Wage
From 6 April 2019, the National Living Wage for workers aged 25 and over will increase from £7.83 to £8.21.
Other national minimum wage rates are also set to increase for a range of individuals aged 25 and under. For those that are 21 but not yet 25, the hourly rate rises to £7.70, and for those between the ages of 18 and under 21, this rises to £6.15. For workers that are 16-17, the hourly rate will be £4.35. There will also be an increase to the hourly apprentice rate, from £3.70 to £3.90, and the daily accommodation offset will be £7.55.
Rises to Statutory Rates of Pay
There are also various changes to statutory rates of pay, increasing the weekly payments available for the different family rates. For maternity pay, adoption pay, paternity pay and share parental pay, the weekly payment will increase to £148.68. For statutory sick pay, this will increase to £94.25 per week.
Employment Tribunal Compensation Payments Changing
Every year, compensation limits are increased, normally in line with the retail price index (RTI) for the previous September. The Employment Rights (Increase of Limits) Order 2019 reflects the increase in the RTI of 3.3% from September 2017 to September 2018. As such, the following compensation caps will increase from April 2019:
- The limit for unfair dismissal compensation will increase to £86,444;
- The statutory redundancy payment (and basic award for unfair dismissal) will increase to £15,750; and
- The maximum amount of a weeks’ pay (used to calculate different types of award) will rise to £525.
Pay Slip Changes
Currently, the right to receive an itemised payslip is reserved for employees only. However, from 6 April 2019, this right will be extended to workers.
In addition, employers will need to include the total number of hours worked on the payslip, where the pay varies according to the hours worked, for example under variable hours or zero hour contracts. This can be done either as an aggregate figure or as separate figures for different types of work or different rates of pay.
Flexible working introduced for the armed forces
From April, enlisted personnel (who are not commission officers) will be allowed to request two types of flexible working. Part-time working allows personnel to agree specified days on which they are not required to be available for active service. Alternatively, ‘service on a restricted separation basis’ enables restrictions to be placed on the number of days on which personnel can be required to perform duties away from a specified place. These two types of flexible working will be collectively known as ‘flexible service’.
Other Changes in the Pipeline
Post Brexit Immigration Rules - irrespective of whether the UK leaves the EU with a deal, it is envisaged that the rules around the employment of EU nationals is likely to change at some point in the future. Whilst it will take time for the legislation to change, the Government has already introduced a regime under which EU workers can apply for so called ‘settled status’ to be able to live and work in the UK on an indefinite basis. However, over the coming months, employers may need to implement changes to internal policies and recruitment processes to ensure these are in line with any restrictions placed upon the employment of foreign nationals.
Parental Bereavement Leave and Pay - the Government has confirmed that it intends to introduce a right for bereaved parents to take time off work as a single two week period, as two separate periods of a week each, or just a week. The intention is for this entitlement to be taken within 56 weeks from the date of a child’s death. Whilst the new right is expected to come into effect in April 2020, employers should start putting in preparations for this now and decide whether to introduce their own bereavement leave policy if they don’t have one already.
Ethnicity pay reporting – the Government has recently considered whether mandatory ethnicity reporting should be introduced for large employers, to complement gender pay gap reporting. The consultation, which ended on 11 January, explored which categories of employer should be covered by the obligation, what ethnicity pay data could be reported, and what supporting information employers would need to provide. We expect to hear the results of the consultation in the coming months.
Employment Status - following the Taylor Review, the Government published its Good Work Plan, following various consultations into employment status and modern working practices. The publication sets out the Government’s commitment to protect and strengthen workers’ rights, and improve the clarity of the employment status test, with the potential aim of harmonising the position under employment and tax law. We anticipate that there will be further developments in this area in 2019.