29th May, 2020
Key Employment Changes from April 2020
Below are the key Employment Law changes which have come in to affect from April 2020.
Increase in the national living wage (NLW) and the national minimum wage (NMW)
From 1 April 2020 the following increases were made:
- the NLW for workers aged 25 and over increased from £8.21 to £8.72
- the NMW for workers aged 21-24 saw an hourly increase to £8.20
- the NMW for workers aged 18-20 saw an hourly increase to £6.45
- Apprentice rates for those aged 19 or those in the first year of an apprenticeship increased to £4.15 per hour.
Changes to the written statement of terms
From 6 April 2020 employers now need to provide a written statement of terms on (or before) the first day of the employment rather than within a two-month window at the start of the employment. This will apply for both employees and workers, including casual and zero hours workers.
There are changes to the information that the written statement must include and employers must ensure workers starting on or after 6 April 2020 are provided with compliant written statements. Employers must also include additional information within the written statement, including (but not limited to) details of all remuneration and benefits, the length of time a job is expected to last, the notice period and specific days and times of work. Where employers used to place more detailed information in a supplementary statement, they must now be provided in the main statement.
Practical tip: To avoid an increased risk of claims, employers should review, amend and update their contract of employment templates and s.1 statements to be in line with these legislative changes.
Parental bereavement leave and pay
A new statutory right has been introduced from 6 April 2020 for bereaved parents to take time off work following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy.
Parental leave will allow parents, adoptive parents, prospective adopters, intended parents under a surrogacy arrangement, parents “in fact” and those person’s partners to take one week, two continuous weeks or two separate weeks off work anytime in the first 56 weeks after the death or stillbirth of the child.
The legislation also providers for statutory parental bereavement pay (the equivalent of paternity pay) and eligibility for the pay is subject to having at least 26 weeks’ continuous employment and subject to the earnings of the parent reaching the minimum level.
Employers should review their policies to ensure that they include time off for bereaved parents and communicate these policy changes as soon as possible.
The proposed changes to IR35 off-payroll working due to come into force in April 2020 has been postponed and will be a welcome relief to many. However, the government remains committed to reintroducing this policy to ensure that people who are working like employees, but through their own limited company, pay broadly the same tax as those employed directly.
Businesses now have until 6 April 2021 to prepare to implement the new rules and issue status determinations. Any businesses which had already done this, can withdraw the status determination statements and reissue next year.
Increase in employment tribunal awards
Increased limits on certain awards in employment tribunals and other statutory payments have been in place since 6 April 2020 as follows:
- The new maximum compensatory award for unfair dismissal is now £88,519
- The maximum amount of a week’s pay (used to calculate statutory redundancy pay amongst others) is now £528
Increase in statutory redundancy payments
New limits on employment statutory redundancy payments came into force on 6 April 2020.
Employers should ensure that calculations for statutory redundancy payments are made on the basis of this maximum amount for redundancy dismissals on or after 6 April 2020.
Holiday pay reference period adjustment
From 6 April 2020 the holiday pay reference period increased to 52 weeks. Employers who engage workers with variable hours or those in seasonal roles will now be required to look back across a 52-week period to calculate the average weekly pay for that worker. This has increased from a 12-week reference period.
Many workers with irregular working patterns were often disadvantaged by the 12-week reference period, so the aim of is to try and ensure that those who do not have a regular working pattern are not at a disadvantage by having to take annual leave at quieter times of the year when weekly pay is typically lower.
Employers should also check the contracts of employment of workers with irregular working hours to ensure that, where the reference period is mentioned, it is updated with the new period.
Increase to statutory pay rates
The weekly rate of statutory maternity, paternity, adoption and shared parental pay increased to £151.20 from 5 April 2020.
The weekly rate of statutory sick pay increased to £95.85 from 6 April 2020.
Postponement to Gender pay gap reporting
Due to the Coronavirus outbreak, the Government Equalities Office and the Equality and Human Rights Commission have taken the decision to suspend enforcement of the gender pay gap deadlines for reporting this year (2019/2020).
As most employers will already have obtained the information prior to the suspension, they will be urged to update this information on their websites as soon as the suspension is lifted.
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