New changes to employment law are scheduled for 2020 and beyond. Here is a quick-fire overview of the scheduled changes most relevant for owners and managers of SMEs.
Minimum wage increase
In April 2020, the minimum wage will increase by 50p an hour for everyone over the age of 21. Apprentices will receive £4.15 an hour, an increase of 25p per hour.
Written statements
Again in April, employers will be under a legal obligation to provide a ‘written statement’ to new employees on their first day. This will likely reinforce obligations employers already have – but which many (especially those who own smaller businesses with few employees) do not take up – to issue new employees with a written contract within a maximum of eight weeks.
Parental bereavement leave
The Parental Bereavement (Leave and Pay) Act 2018 will come into force on April 6th. Under this law, parents who lose a child under the age of 18 will be entitled to 2 weeks’ leave as a day-one right from the start of employment; the leave will also be available for parents who suffer a stillbirth after 24 week’s pregnancy. This leave can be taken in one or two-week blocks and is available for the first year after a child’s death. Employees are entitled to separate bereavement leave for each child lost.
Holiday pay reference period
For employers who hire employees on variable hours contracts, the holiday pay reference period is set to rise from 12 weeks to 52 weeks in April. For employees who have worked at a company for less than 52 weeks, the holiday pay reference period will be however many weeks they have worked. For those who have worked 52 weeks or more, however, the amount of holiday an employee is entitled to – both in terms of days/hours of holiday and amount paid – will need to be calculated according to the average number of hours they worked per day for the previous 52 weeks.
IR35 regulation extending to private sector
From April 6th 2020, some SMEs will need to decide the employee status of self-employed or contracted workers. This is in order to stop contractors who are effectively treated as employees not paying the same amount of tax as they would as registered employees with the company. This may also affect businesses, who would need to pay National Insurance contributions on any self-employed or contracted workers who count as employees.
Businesses that hire less than 50 employees will not be affected by the upcoming changes to IR35, unless they have an annual turnover of more than £10.2 million or a balance sheet total of more than £5.1 million.
Migrant salary threshold to drop and points-based system to be introduced
It has recently been announced that the salary threshold for skilled migrant workers coming to work in the UK will drop from £30,000 to £25,600, following Britain’s exit from the EU. Also, the government has announced they will be introducing a points-based immigration system for awarding visas. Some business owners are worried that this system will make recruitment much more difficult, as the pool of potential employees for roles will be greatly reduced.
Potential employment law changes
There are several other employment law changes currently in discussion that may come into effect in 2020. These include changes for:
Requests for flexible working
Employers may have to start accepting employees’ requests for flexible working by default – unless the employer has ‘good reason’ to reject the request. This proposal hasn’t been fully detailed yet, so what constitutes flexible working and good reasons for rejection of the request are not yet clear. However, employers should prepare themselves for accommodating more flexible working arrangements.
Neonatal leave
The government may introduce a new law on neonatal leave and pay for working parents with premature or sick babies. Neonatal leave would allow new parents (mothers, fathers and partners) to receive one week of paid leave for each week that their baby is in hospital.
