Gordons Employment Update - 15 January 2020

Wednesday 15th January 2020

Happy New Year!

We have set out the key anticipated employment law changes which will take place in 2020.

31st January 2020
Several pieces of legislation are expected to come into force when we leave the European Union to amend our legislation to reflect our exit.  There will be new immigration legislation and legislation to preserve EU-derived rights in domestic law.  There will be no immediate major changes.

1st April 2020
National minimum wage rates increase:

  • Workers aged 25 or over: £8.72 per hour;
  • Workers aged 21 to 25: £8.20 per hour;
  • Workers aged 18 to 20: £6.45 per hour;
  • Workers aged 16 to 17: £4.55 per hour; and
  • Apprentice Rate £4.15: per hour.

6th April 2020
Changes are being brought in relating to the requirement to provide written statements of particulars. Currently this applies to employees only, and is usually done in the form of an employment contract which must contain certain specified information.  The changes being made are:

  • A statement of particulars (terms of engagement) must be provided to all workers (not just employees). They still don’t need to be provided to the genuinely self-employment (although some sort of contract is still advisable!)
  • The right to receive such particulars arises on the first day of engagement, not within two months as was previously the case. There are some exceptions in relation particulars which cover pensions, any collective agreements in place and rights to training. It is permitted for these to be provided later, in instalments. However, these particulars must still be given within two months, even where the employment ends before the conclusion of the two month time limit.
  • The statement must contain additional information including the days of the week required to be worked (and any variation to that), details of terms and conditions relating to paid leave plus particulars of any other benefits, any probationary period and training.

This applies only in respect of workers starting on or after 6th April 2020 and is not applied retrospectively. Existing employees can request an updated statement of terms, which ordinarily will need to be provided within one month of the request.

It will also be necessary to provide a statement of changes should any of the required  terms be changed on or after 6 April 2020. This will need to be provided at the ‘earliest opportunity’ and in event not later than one month after the change has been made.

Existing workers on the other hand are not afforded the right to a written statement immediately post 6 April 2020.

6th April 2020
The reference period for calculating holiday pay is being changed from 12 weeks to 52 weeks. This is used for calculating average holiday pay where a worker has no normal working hours or they have normal working hours but the amount of pay varies.

6th April 2020
The ‘Swedish derogation’ exception to the Agency Worker Regulations is removed.  All agency workers therefore are entitled to equality of pay with employees after 12 weeks in the same role with a hirer.  Previously there was an exemption where the worker was engaged on a ‘Swedish derogation contract’ which provided for pay between assignments.

6th April 2020
Employer National Insurance contributions will be payable on termination payments above £30,000 (as well as income tax which is currently payable).

6th April 2020
Employment businesses need to give a key information document to agency workers which clearly and succinctly sets out certain key information concerning their relationship, such as information about pay, benefits, costs, deductions and fees, together with an example statement which illustrates the remuneration which the agency worker can expect to receive.

An employment business is a business (often referred to as an agency) which arranges temporary work for agency workers with a hiring company and the agency worker is paid by the agency rather than the hiring company. It does not cover recruitment agencies which introduce work seekers to hiring companies who then become employees of the hiring company.

6th April 2020
IR35 changes come in, extending the off-payroll working rules to large and medium businesses in the private sector.  It can apply where individuals are engaged via an intermediary such as a personal service company.  The effect is to shift responsibility for determining tax status from the intermediary to the entity engaging it.  If IR35 applies the individual should be taxed as if they were an employee.

Possibly sometime in 2020? – Dates Unknown
The introduction of 2 weeks’ paid leave for bereaved parents.

Shared parental leave for working grandparents. The original plan was for this to come into force in 2018 but it didn’t and things seem to have gone quiet at the moment on this proposed change.

A requirement that all tips must go to the workers.

A £95,000 cap on public sector exit payments and claw-back rules where someone returns quickly to a job in the same area.