How workers’ rights will change in 2020
Feb 07, 2020
We’ve already addressed a few of the upcoming changes to workers’ rights in previous Paish Tooth articles. As these changes are all taking effect imminently, we thought it would be handy to provide a reminder, as well as summarise some of the other new rules which employers need to be aware of.
As announced by the government on New Year’s Eve, from 1 April 2020 there will be an increase in official minimum wage rates. Wages for workers aged 25 and over will increase by 6.2%, over four times the rate of inflation, which may have a significant impact on businesses.
Holiday pay calculations
From 6 April you will have new rules to follow when calculating holiday pay for any of your employees who may be on variable pay. Variable pay includes workers on commission and in receipt of bonuses, as well as hourly paid casual workers. The idea is to build a more accurate picture of your employee’s average earnings, and then use this as a basis for calculating their holiday pay.
Right to a written statement
At the moment, an employer has up to two months from an employee’s start date to provide them with a written statement of terms – i.e. an employment contract.
From 6 April 2020 this regulation will change, and going forwards employees must be given the full written particulars of their employment on the very first day they start work. The new rules will apply to all workers, including those in the gig economy and on zero hour contracts, with the aim of providing greater transparency for the UK workforce.
An outline of the information that must be included in a written statement of employment particulars is available on the Gov.uk website. From April 2020, the information which employers have to provide from day one must be expanded to include the following additional information:
- How long a job is expected to last, or the end date of a fixed-term contract
- How much notice an employer and worker are required to give to terminate the agreement
- Whether a worker is eligible for sick leave and pay
- Other types of paid leave e.g. maternity leave and paternity leave – whether the worker is eligible and where to find more details on the employer’s policy
- The duration and conditions of any probationary period
- All remuneration – not just pay but contributions in cash or kind, e.g. vouchers and lunch
- Which specific days and times workers are required to work
Agency workers may currently be working subject to a Swedish Derogation, meaning that they don’t receive equal pay to permanent employees in return for receiving a guarantee of pay during gaps in assignments. From 6 April 2020 this law will be abolished, and agencies will be forced to pay agency staff the same as the permanent employees in a workplace, after they have been there 12 weeks. This may well lead to an increase in fees if you are using agency staff.
Review of new off-payroll rules
In January the government launched a four-week review of the changes to IR35 ‘off-payroll’ working rules scheduled to come into force in April 2020, as a result of mounting criticism about the way the new rules will operate. The review will consist of the government holding a series of roundtable meetings with stakeholders representing those affected by the changes. It is scheduled to conclude by mid-February in time for the 6 April 2020 implementation date.
It is unlikely that there will be a significant U-turn, but there may be scope for the impact of the legislation to be reduced in terms of the range of contractors to whom it will apply, or the size of businesses who will be obliged to operate it. The new rules are currently scheduled to apply to large and medium-sized businesses as defined by the Companies Act.
Prior to the formal publication of the review, HMRC has recently announced that changes to off-payroll working rules will only apply to payments made for services provided from 6 April 2020. Until now the rules were going to apply to any payments made from 6 April 2020, regardless of when the services were carried out. This means that organisations will only need to determine whether the rules apply for contracts they plan to continue beyond 6 April 2020.
A lot of criticism has stemmed from how difficult it is to establish whether a worker should be considered as an employee or an off-payroll contractor. The government will also carry out a further review of its enhanced CEST (Check Employment Status for Tax) tool, which is designed to assist businesses in checking employment status. Meanwhile HMRC has published a new off-payroll working factsheet for contractors, which provides an overview of the changes coming in April 2020 and what they need to do by this deadline.
The government will also consider feedback from those bodies who implemented the off-payroll rules in the public sector back in 2017, in an attempt to ensure the smooth and successful implementation of the reforms.
Parental bereavement leave
A new law, the Parental Bereavement (Leave and Pay) Act, will be coming into force in April 2020. This will entitle all employed parents the right to two weeks’ leave if they lose a child under the age of 18, or if they suffer a stillbirth from 24 weeks of pregnancy. This is a right for all parents from day one, regardless of how long they’ve worked for their employer.
Parents may also be able to claim statutory pay during their bereavement leave, if they have over 26 weeks of continuous service (six months) with their employer and if they earn above the weekly average earnings rate (£118 per week for 2019/20). Statutory pay is £148.68 a week (from 5 April 2019) or 90% of average weekly earnings, whichever is less.
As an employer you should also remember that mothers who lose a child after 24 weeks of pregnancy, or during maternity leave, don’t lose their entitlement to maternity leave and pay. If notice has been given for paternity leave then this will usually be honoured in this situation too.
If you have any questions about workers’ rights, either as an employer or an employee, please contact the Paish Tooth team and we’ll be happy to help.