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Employment Law Updates April 2020

Posted on: 30th Jun 2020 by: Demos HR Solutions

Employment Law update April 2020

 

1. Annual increase to National Minimum Wage from 1 April 2020

  • National Living Wage for workers 25 and over: £8.72 (from £8.21)

  • National Minimum Wage for workers aged 21 – 24: £8.20 (from £7.70)

  • National Minimum Wage for workers aged 18 – 20: £6.45 (from £6.15)

  • National Minimum Wage for school leavers under 18: £4.55 (from £4.35)

  • Apprentices minimum wage: £4.15 (from £3.90)

  • (The rate of statutory sick and parental pay have also increased)

 

2. Average week’s pay calculations for variable pay workers

From April 2020 there has been an increase in the pay reference period. This is relevant for calculating an average week’s pay where a worker has variable remuneration. If an employee is on the same salary every month this won’t affect any calculations.

If a worker has been employed for at least 52 weeks, the reference period has increased from 12 weeks to 52 weeks. Where a worker has been employed for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed.

 

2i. Holiday pay calculations for variable pay workers

The reference period used to calculate average holiday pay for workers with irregular hours increased from 12 weeks to 52 weeks on 6th April 2020. Holiday pay calculations for those with regular overtime hours and additional payments should be based on the average of the previous 52 weeks earnings, not on basic pay.

 

3. Contracts of employment: a day one right for employees and workers

From April 2020, both employees and workers are entitled to a written statement of their employment details from day one of their employment. Historically this used to be 2 months.

Also, there are some extra details which from April are mandatory in statements, such as details of paid maternity leave entitlements, and any probation period, training provision/requirements and benefits entitlements.

 

4. Stable Contracts

Workers engaged in ‘unstable’ or ‘unpredictable’ contracts such as casual hours or zero hours contracts previously had no power to request more stable contracts, but with effect from April they now have the right to request a these, and employers have to consider their request, although you will be able to refuse the request on certain grounds.

 

5. Extending the break in continuous service

Another change brought in in April was the increase in the gap of breaks in employment with the same employer to break continuous service. This gap has increased from 1 week to 4 weeks so only a gap of 4 weeks or more in employment with the same employer breaks the continuous service period for calculating employment rights.

 

6. New parental bereavement leave rights for employees

From 6 April 2020 the Parental Bereavement (Leave and Pay) Act 2018 came into force. This gives employees who lose a child under the age of 18, or who suffer a stillbirth from the 24th week of pregnancy, the right to take two weeks’ unpaid leave

This is a day one right, so applies regardless of how long the employee has been employed and extends to adopters, foster parents, guardians, and relatives or family friends who have taken responsibility for the child’s care.

If the employee has been employed for at least 26 weeks, they will also receive statutory pay during the two week leave period.

 

7. Change to tax treatment of termination payments above £30,000 introduced

Employers are liable to pay Class 1A national insurance contributions on termination payments above £30,000 that are subject to income tax by the employee. 

 

8. Abolition of the Swedish derogation relating to pay for agency workers

The Agency Workers (Amendment) Regulations 2019 (SI 2019/724) abolish the Swedish derogation, which gives employers the ability to pay agency workers less than their own workers in certain circumstances. Under the derogation, agency workers could exchange their right to be paid the same as directly recruited employees for a contract guaranteeing pay between assignments. This opt out has now been repealed and means that all long- term agency workers are entitled to the same rate of pay as their permanent counterparts. This ultimately means that employing agency workers will now be more expensive

In addition, agency works are entitled to a key information document that clearly sets out the type of contract they will have and they pay they receive.

 

9. Reduction to theshold for a request to set up information and consultation agreements

The threshold required for a valid request to set up information and consultation arrangements under the Information and Consultation of Employees Regulations 2004 (SI 2004/3426) has been reduced from 10% to 2% of employees. The requirement for the request to be made by a minimum of 15 employees remains in place.

 

10. Right to carry over statutory annual leave for two years introduced

The Working Time (Coronavirus) (Amendment) Regulations 2020 (SI 2020/365) provide that workers have the right to carry forward untaken statutory holiday for two years where it has not been reasonably practicable to take the leave due to the coronavirus (COVID-19) pandemic. The measure is to protect workers from losing their four-week minimum statutory holiday entitlement under reg.13 of the Working Time Regulations 1998 (SI 1998/1833) and to provide employers with flexibility and staff to deal with the consequences of the coronavirus outbreak.

New regulation has also been introduced in relation to entitlement to statutory sick pay for those shielding and self isolating

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