07 May 2019
April 2019 Employment Law Changes
1st April: National Living & Minimum Wage Increase
Every April, the National Minimum Wage increases; this year they have both increased by 4.9%
The wage bands are different for all age groups however. This means that:
- Apprentices will now be receiving £3.90 per hour;
- Workers aged 18 or under will receive £4.35 per hour;
- Workers aged 18 to 20 will receive £6.15 per hour;
- Workers aged 21 to 24 will receive £7.70 per hour; and
- Workers aged 25 and over will receive £8.21 per hour.
In 2018, the government named and shamed 419 businesses for paying below the National Minimum Wage (and forced them to pay out £2.54 million).
Don’t make that mistake in 2019—update your payroll in time for April. And remember to check that any pay deductions for uniforms or equipment don’t tip your staff below the National Minimum Wage. Or, you could end up with an unwelcome letter from HMRC...
You should complete a full review of staff salaries ahead of time and work closely with your payroll and personnel departments to ensure wages are in line with legal requirements.
6th April: Changes to Payslips
As of the sixth of April, you must give itemised payslips to all workers.
If you don’t give your workers itemised payslips, a tribunal can declare that you have breached your workers’ rights and then force you to repay your workers in respect of any deductions made.
Itemised payslips make it much easier for HMRC to spot and prosecute businesses that pay below the National Minimum Wage (which increased in April).
To avoid this, you should work with your HR and payroll departments to put appropriate provisions in place.
If you’re unsure what to include in your payslip, you can download a sample template in the free download section of the Croner website.
6th April: Pension Contribution Increase
Another major change that came into force on the sixth of April was the increase in Pension contributions.
Your employee needs to put at least 5% of their pre-tax salary into their pension, and you have to put in 3%, making the total pension contribution 8%.
If you are feeling generous, you can surpass the 8% and contribute even more to the pension pot, however, your employee will still need to contribute the minimum of 5%.
You should liaise with your HR and payroll departments to ensure they understand what they are required to do and to make sure that appropriate provisions are in place.
7th April: Statutory Pay for Maternity, Paternity, Adoption & SPL Increase
On the seventh of April, the minimum you need to pay staff who are on maternity, paternity, adoption or shared parental leave increased from £145.18 to £148.68 per week.
The employee who wishes to take leave must still meet the minimum requirements for entitlement to receive statutory pay.
One of these requirements is that the average earning of that employee is £118 per week, a figure that has increased from £116.
Again, you should complete a full review of staff salaries ahead of time and work closely with your payroll and personnel departments to ensure that employees are in receipt of their rights and entitlements in line with these changes.
The Good Work Plan
6th April 2020: The Good Work Plan
The Good Work Plan comes into force on the sixth of April in 2020, and has been dubbed the “biggest overhaul of employment law in 20 years.”
The plan has come about as a result of the independent review conducted by Matthew Taylor.
Some elements of the plan are still pending further clarity, but there are some areas you can begin to prepare for now.
1. From April 2020, all workers will be entitled to receive a document that sets out all of the key terms of their contract. This document must be given from day one of their contract. Currently employers only need to provide key terms of employee’s contract within two months. You should liaise with HR to be ready to implement this change – be mindful of any additional administrative burdens this could place upon them.
2. All workers have the right to request a ‘more stable’ contract. Workers will have this right after 26 week’s service. You should be prepared to introduce a system for processing these requests, which can be similar to how flexible working requests are currently handled. Remember that whilst you can refuse this, you will need to provide sound business reasons for doing so. Also, like flexible working, it looks like there will be a three-month timeframe with which to deal with the request.
3. The break in continuous service will increase. Currently, a gap of just one week can break an individual’s continuity of service. This can restrict their access to key rights of employment, and can occur despite the employee working regularly on and off for the same employer. Therefore, as of April 2020, the gap will increase to four weeks, making it easier for those employees who work sporadically to qualify for more employment rights. You should review current processes and liaise with HR and payroll to ensure they are aware of this and are not unlawfully denying rights to workers. Also re-evaluate current processes in light of this to avoid falling into traps – you may end up providing having to provide rights and entitlements when you don’t intend to because of previous allowances when taking on casual workers.
4. A big change for those working in the hospitality and catering industry is that employers will be banned from taking “administrative fees” from tips and gratuities—they will pass directly to the individual, rather than be taken by the employer. Organisations are advised to carry out a review of their current tipping practices, ensuring they understand the process in place and whether deductions are being made from tips. Any documentation in place on this practice can also be reviewed. This will ensure the organisation is in a good position to implement the new restrictions placed upon them by the legislation once these are introduced.
5. There will also be further protections for agency workers. They will have the right to be provided with Key Facts pertaining to the type of contract they are accepting, as well as their rate of pay, who is responsible for paying it, and any deductions or fees that might be taken. You should liaise with HR to be ready to implement this change.
If you need further support with any of the major employment law changes mentioned in this expert view, or have another HR-related query, speak to a Croner Expert today on 01455 858 132.
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