Changes to Employment law that came into effect in April 2020
With all that’s happening currently you would be forgiven for missing the recent changes, so here is a quick A-Z summary of the main ones. If you require any further information on any of them, please do not hesitate to contact us.
From 6 April 2020, you can no longer employ agency workers under the “Swedish Derogation” principle, which entitled you to pay them differently to your own employees. If you do have any agency workers on Swedish Derogation contracts you should look at either taking them on as direct hires or moving them onto standard agency contracts.
Employer to Pay NIC Charge on Termination Payments.
From 6 April 2020, you will now have to pay employer’s national insurance contributions (NICs) on the balance of any termination payment exceeding £30,000. So if, for example, the payment is £35,000 you will have to pay Class 1A NICs on the ‘additional’ £5,000.
The exceptions to this are if the employment was terminated prior to 6 April 2020, or the termination payment is being made in instalments – provided the first instalment was paid before 6 April 2020.
The reference period for calculating holiday pay has now increased from 12 weeks to 52 weeks from 6 April 2020. This is likely to affect the holiday pay for people who work intermittent shift patterns or only certain weeks.
Information and Consultation Threshold Reduced from 10% to 2%
This is the threshold for demanding information and consultation arrangements under the Information and Consultation of Employees Regulations 2004. This took effect from 6 April 2020.
This was due to happen this April but, in light of the current COVID-19 situation, the changes have been postponed until 6 April 2021.
National Minimum Wage
From 1 April 2020 the rates will now be:
£4.55 Age 16 – 17 (young worker’s rate)
£6.45 Age 18 – 20 (development rate)
£8.20 Age 21 – 24 (standard adult rate)
£8.72 Age 25 and above (also known as the National Living Wage).
Maternity Pay / Paternity Pay / Adoption Pay / Shared Parental Leave Pay
From 5 April 2020, the above statutory pay will increase to £151.20.
Parental Bereavement Leave
From 6 April 2020, any working parent who loses a child under the age of 18 is now entitled to two weeks’ paid bereavement leave.
Redundancy and Unfair Dismissal Caps
From 6 April 2020, a week’s pay will now be capped at £538, making the maximum statutory redundancy award and unfair dismissal basic award £16,140.
The cap on the compensatory award for unfair dismissal will now be £88,519.
Statutory Sick Pay
From 6 April 2020, SSP will increase to £95.85.
Written Statement of Employment Particulars
From 6 April, you must now provide workers, as well as employees, with an employment contract or written statement of employment particulars (Section 1 Statement) on or before their start date.
In addition to the information you had to provide before, you now have to include:
- Which days they are expected to work.
- Whether the hours / days they work are variable, and if so how.
- Details of benefits, including non-contractual benefits.
- Details of any probation period including conditions and duration of it.
- Details of any training the worker has to complete.
- Details of any training required by you but that you will not pay for.
Failure to do so could result in an employee or worker recovering up to 4 weeks’ pay (now capped at £538) as part of a separate, successful tribunal claim.