Employment Law Updates for 2020

With big news about the change in the status of the UK following Brexit on January 31st, 2020, keeping up with changes to the law will ensure that you are prepared to deal effectively with those changes.
2020 is going to be a big year in terms of changes to pay, terms and responsibilities of employers, employees, and companies, with most changes set to come into play on 6th April 2020 and beyond.

What is Employment Law?

Employment law, in the most basic terms, is a set of legislation that governs the relationship between the employee and the employer; it enshrines in law some of the aspects of that relationship in order to protect both the employee and the employer.

Employment Law covers pay, conditions, recruitment, and discrimination, as well as health and safety, working times and absence.

In order to come into practice, there must be a contract of service between an employer and an employee.

Employer responsibilities

The employer controls how, where and when the work is completed by the employee, and this is typically on the employer’s premises, using the employer’s tools and/or materials.

When it comes to looking at whether this agreement is an employment contract, or whether it is a worker who is self-employed, for example, an employment lawyer would ask If it was a ‘master and servant’ relationship; is the employer in complete control of when, where and how the work is completed?

What does employment law cover?

Wages – this includes any payment of a fee, bonus or commission, holiday pay, sick and/or maternity pay.
Working Times Regulations – for example, a maximum night shift is 8 hours, with minimum rest hours of 11 hours between shifts
Leave, sickness and pensions
Equality – Sexual orientation, pregnancy, disability, equal pay, discimination protection
To understand the changes in employment law – and why these changes have happened – it is important to understand what the benefit of employment law is.

What is the Purpose of Employment Law?

Broadly speaking, employment law allows us to establish and maintain minimum standards for employees. These include wages, Working Time Regulations, Disciplinary Procedures, Equality and leave.

Employment law focuses on protecting workers while giving employers a well established framework to create contracts and employ people. Widely speaking it is always beneficial for both parties to continuously strive towards a safe, mutually beneficial working relationship, which is where employment law can play its part in establishing those boundaries and guidelines.
Of course, even with the most stringent employment law following, disputes can arise in the employer/employee relationship. In this case, it might be worth reading our article on employment disputes.
Changes to Employment Law in 2020

Brexit

As Britain is withdrawing over the next year from the EU, by 31st December any EEA citizens will no longer be allowed to stay and work in the UK.
Until the final exit date, of course, they are welcome to stay and work, but if they would like to stay beyond that, they need to obtain settled or pre-settled status before the cut-off date of 30/06/2021.

How to Prepare Your Business

If you and your business are reliant on EEA workers and employees, it might be worth creating a contingency plan in case they do not want to stay.
To find out more about the impact of Brexit and keep up to date with developments, gov.uk contains up-to-date information and news you may find useful.

Pay

National Minimum Wage
The rate of National Minimum Wage (NMW) will go up in April 2020. Different rates are still in force for different age groups, as below:
25+ increase from £8.21 to £8.72
21-25: increase to £8.20
18-21: increase to £6.45
Under 18 but above compulsory school age: increase to £4.55
Apprentices: increase to £4.15
The Government has also announced that the National Living Wage will rise to approximately £10.50 by 2024, so this is something to bear in mind.

How to Prepare Your Business

Be aware that these changes are coming in and they start from the 1st April 2020, rather than the beginning of the new tax year on the 6th April.
For more information on the National Minimum Wage and the National Living Wage, please check the gov.uk page on national minimum wage.
The Good Work Plan and Agency Workers
There is a loophole in temporary workers contracts that means they do not have to be paid equivalent rates to their permanent colleagues. From 2020, this loophole will be closed, and agency workers will be paid the same as permanent staff after 12 continuous weeks.

How to Prepare Your Business

If you use an employment agency, it is up to them to ensure that they are paying their staff appropriately.
Parental Bereavement Leave and Pay / Jack’s Law
From April 2020, if a child under the age of 18 dies, the parents or persons with parental responsibility are entitled to take 2 weeks paid leave.

This paid leave can be taken any time in the 52 weeks following the child’s death and they don’t need to be taken consecutively.

How to Prepare Your Business

There are no particular steps to take in order to prepare for this change in legislation; it should be dealt with in a similar matter to other leave requests.
Note: You can easily find out more about Jack’s Law and the Government’s decision to introduce this legislation.

Annual Leave

To make sure that the provision for annual leave and pay is fair to seasonal and ad-hoc workers, as part of the Good Work plan, the period used to work out an average week’s pay and hours will now be 52 weeks rather than 12.

How to Prepare Your Business

Make sure that all your records regarding hours worked for the last year by your employees are up to date so that holiday allowance can be calculated correctly.
The Government’s Good work plan is a statement of their vision for the future of the UK labour market.
Right to a Written Statement of Particulars
As it currently stands, an employee should receive a written indication of the conditions of their employment, including pay, leave, disciplinary and grievance procedures and any other relevant points, within two months of their start date.

With this new legislation coming into effect in 2020, employees must receive this information in the form of a Statement of Particulars on the day they start their employment. This is part of the Government’s Good Work plan.

How to Prepare Your Business
When you begin the recruitment process, get the paperwork together so that when a confirmed offer of employment is in place the new employee can receive their Statement Of. This will help to streamline your onboarding process too.

Other
IR35
Although the Queen didn’t make mention of this in her Speech in December, the IR35 legislation is set to go through in April.

This means that an individual that works as an employee, but for a limited company of their own, will pay equivalent rates of tax and National Insurance. This does not relate to the self-employed, and it shifts the onus to determine the rate of NI and tax to the entity receiving the service.

How to Prepare Your Business

If you regularly use contractors, you need to ensure that they are paying tax and National Insurance correctly. Find out if they are a Limited Company or a sole trader.
You can easily find out more information about how the changes to IR35 will affect your business online.

The Executive Pay Gap

The first report of the pay gap between the chief executive and the average UK worker is due in April. This is to be compared with a snapshot of the difference from April 2019 and needs to be reported annually.

How to Prepare Your Business

Make sure your records are up to date.

Tax on termination payments

If a termination payment is over £30,000, it will now be subject to taxation. They will be classed as class 1A NICs (employer liability only).

How to Prepare Your Business

Be aware that your liability for NIC payments will change if you offer a termination payment over £30,000.

For more information on this policy, which was first introduced in 2018, please see the gov.uk page here.

Impact on Workers

Developments in Employment Law need to strike a balance of benefits for employers and employees.

Much of the impact of these new pieces of legislation will be positive for workers, with better leave allowances, more equitable holiday for seasonal workers and an increase in the National Minimum Wage.

Some, like the changes to IR35, might make it more difficult for ‘off-payroll’ or contract workers to find employment in the private sector.

Impact on Employers

In order to fully understand the impact changes like these will have on your business you need a legal team that understands the unique challenges you face.

KLG and their HR team are fully versed in all the changes to come as we go through 2020 and face the post-Brexit transition period. For up-to-date information and specific advice to help your business, contact us and get the help you need.
Next Steps
As part of the Queen’s Speech in December, mention was made of the Employment Bill, which seeks to support employees in different ways, including:
– Stable contracts
– Extended redundancy protections, especially for pregnancy
– Leave for neonatal care
– Additional leave for unpaid carers
– Creating a new single enforcement body to protect workers
– Flexible working by default
Now, it is likely to be a little while before this bill becomes law, but it is worth keeping an eye on as things can change so quickly in this post-Brexit landscape.

KLG Law offers specialised legal services for both employees and employers, ranging from settlement agreements, pay disputes to unfair dismissal. As employment law specialists, for legal advice and more information, contact us today. Otherwise find more information about what we do on our KLG Law website or blog.