What do employers need to know?
On 6 April 2020, new employment laws will be coming into force which all employers need to know about. Most of these changes result from the government’s Good Work Plan, which was published in December 2018, and seek to improve the employment rights of casual workers and those working in the gig economy.
What are the changes?
- All workers will have the right to a written statement of terms on or before the first day of employment
There are two main things to note from this change. First, the right now applies to workers not just employees. Secondly, the right to receive the statement is on or before the first day of employment – rather than within the first two months of employment as the law currently stands.
- Additional information will need to be given in the written statements of terms for your new employees and workers, including:
- the length of time a job is expected to last
- the notice period
- eligibility for sick leave and pay
- other rights to leave (e.g to maternity, paternity, adoption and parental leave)
- any probationary period
- all pay and benefits
- any training entitlement or training the worker needs to complete
- specific days and times of work and if/how they may vary.
Although most employers will already provide this information in their contracts for employees, they may not include all of it in their contracts with casual workers or zero hours workers. In particular, it is common to say in zero hours contract that the worker will not have set hours or days of work. This will need to change for any workers you take on from 6 April 2020 because from then on you will need to give details of the days and times of work the worker may be required to do along with details of how these days/times may vary and the method for determining that variation.
- The threshold for employees to be able to request workplace information and consultation arrangements will be lowered from 10% to 2% of employees, but the minimum number of employees required to be able to make this request stays at 15.
- The reference period for determining a worker’s average week’s pay for the purposes of calculating holiday pay will increase from 12 weeks to 52 weeks
This is an important change for employers whose workers have variable pay, either because they do not have normal working hours or because they do have normal working hours but their pay varies with the amount of work done or the time the work is done. The new rules are that where a worker has worked for you for more than 52 weeks, the reference period for calculating holiday is 52 weeks, but if they have been employed for less than 52 weeks, the redefined period is the number of weeks for which they have been working for you.
5. Agencies that provide temporary workers must give individuals seeking work with them a “Key Information” document, which includes information on the type of contract they will be on, the minimum expected rate of pay, how they will be paid and by whom.
6. Termination payments (compensation for loss of employment) which exceed the £30,000 tax free threshold will be subject to Employer’s National insurance contributions.
7. Employees will have the right to take one or two weeks off work following the death of a child under 18 or a stillbirth. The new right to parental bereavement leave will apply to all employees regardless of their length of service and the leave must be taken in blocks. The right to parental bereavement pay -which will be paid at the same rate as statutory paternity pay – will only be payable if the employee has at least 6 months continuous service and has earnings above the lower earnings threshold.
National Minimum Wage increases In addition to the above, taking effect on the earlier date of 1 April 2020, the hourly rates of national living wage (NLW) and national minimum wage (NMW) will increase as follows: ·
- The NLW for workers aged 25 and over will increase from £8.21 to £8.72 per hour
- The NMW for 21 to 24-year-olds will increase from £7.70 to £8.20 per hour
- The NMW for 18 to 20-year-olds will increase from £6.15 to £6.45 per hour.·
- The NMW for 16 to 17-year-olds will increase from £4.35 to £4.55 per hour
- The apprentice rate for those under the age of 19, or in the first year of an apprenticeship, will increase from £3.90 to £4.15 per hour.
Employment Law and HR Update Event
For those of you who are coming to our annual breakfast seminar on 5 March 2020, these changes will be covered in full with practical advice on how you can comply with the new laws. If you have any questions about the forthcoming changes, are concerned that your contracts will not comply with the new laws or you need help drafting changes to your terms or with calculating holiday pay for your workers, please get in touch with the team at Real Employment Law Advice.