April is traditionally a key time of year for employers as the government introduces a range of new legislation and looks ahead to upcoming reforms. Below is a brief snapshot of what is to come.
Increase in the national living wage (NLW) and the national minimum wage (NMW)
From 1 April 2020, the NLW for workers aged 25 and over will increase from £8.21 to £8.72. The government looks set to expand the reach of the MLW further in the coming years to cover workers aged 23 and over from April 2021 and those aged 21 and over within the next five years. Watch this space.
Additional NMW rates are also set to increase from 1 April 2020 with workers aged 21-24 seeing an hourly increase to £8.20 and workers aged 18-20 seeing an hourly increase to £6.45.
Meanwhile apprentice rates for those aged 19 or those in the first year of an apprenticeship will increase to £4.15 per hour.
Changes to the written statement of terms
From 6 April 2020 employers will 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.
The regulations have also added to the information that must be included within the written statement and employers must now include 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.
Parental bereavement leave and pay
The UK government have introduced a new statutory right for bereaved parents to take time off work following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy.
Coming into force on 6 April 2020, parental bereavement 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.
The announcement by the Treasury of the postponement of the extension to the IR35 off-payroll working regime will be a welcome relief to many. However, the decision is to defer – not to cancel – the new regime and 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 but may well have already made preparations and some may already have issued status determinations. If this is the case, then those status determination statements should be withdrawn and redone next year.
Increase in employment tribunal awards
The 6 April 2020 will also see the introduction of increased limits on certain awards of employment tribunals and other statutory payments. The maximum compensatory award for unfair dismissal will rise to £88,519 and the maximum amount of a week’s pay (used to calculate statutory redundancy pay amongst others) will rise to £528.
Holiday pay reference period adjustment
From 6 April 2020 the holiday pay reference period will increase to 52 weeks. What does this mean? For those that work variable hours or those in seasonal roles it will mean that employers will now be required to look back across a 52-week period to calculate the average weekly pay for that employee. Previously the employer was only required to look back across a much shorter 12-week period.
The aim of this 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.
Increase to statutory pay rates
The government has also announced that from 5 April 2020 the following statutory rates or “family friendly” rates will increase to £151.20 per week or 90% of the employee’s weekly earnings if this is lower:
- Statutory maternity pay;
- Statutory paternity pay;
- Statutory adoption pay; and
- Statutory shared parental leave pay.
Statutory sick pay (SSP)is also set to increase from 6 April 2020 to £95.85 per week for those too ill to work. This is paid by employers for up to 28 weeks,
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). This means there will be no expectation on employers to report their data.
Looking to the future
Neonatal leave – the March 2020 budget policy paper confirmed the government’s intention to introduce a 12 weeks’ paid leave for parents of premature babies who are in need of specialist care in a neonatal unit. Early indications suggest that this pay would be in addition to existing maternity and paternity pay provisions.
The government has also launched consultation seeking views on its proposal to give employees a week of unpaid leave each year to provide care. The consultation looks at who should be eligible to take the leave, what the leave can be taken for and the process for taking leave. The deadline for responses has been extended until 3 August 2020.