2020 in upon us. Now is the time to refresh and remind yourself of what lies ahead this year and start to prepare for employment law changes which could affect you or your business (putting Brexit to one side!). Some of the key changes follow, effective 6 April 2020.
1. Written statement of terms to be provided on Day 1
Employees who have been continuously employed for more than one month must be provided with a written statement of terms and conditions of their employment within two months of commencing.
What is changing
All new employees and workers must be provided with a written statement on or before their first day of employment; a day one right. More detailed information will have to be included in the written statement, too. This includes: the hours and days of the week the worker/employee is required to work; whether they may be varied and how; entitlements to any paid leave; any other benefits such as healthcare, vouchers, lunch, etc; details of any probationary period; and details of training provided by the employer. If it has not been done already, employers should start preparing new contracts for new recruits from 6 April 2020.
2. Increased rights for agency workers
The Agency Worker Regulations 2010 entitles agency workers to receive the same pay and basic working conditions as permanent staff once they have completed 12 weeks’ continuous service in the same role.
However, there is a loophole known as the ‘Swedish derogation’. Swedish derogation allows agencies to opt out of equalising the pay of agency workers with permanent staff where the agency continues to pay the agency workers between assignments.
What is changing
The Swedish derogation rule is being removed. From 6 April 2020, all agency workers, after 12 weeks’ continuous service, will be entitled to the same rate of pay as their permanent counterparts.
3. Changes to holiday pay calculations
Currently, to calculate average weekly pay, the reference period used for workers with variable pay is the 12 weeks worked prior to taking annual leave.
From 6 April 2020, the holiday pay reference period will increase from 12 weeks to 52 weeks.
Employers will be required to look back at the previous 52 weeks where a worker has worked and received pay, discarding any weeks not worked or where no pay was received, to calculate the average weekly pay.
The Government’s Good Work Plan states that the changes will allow greater flexibility for workers in choosing when to take holiday, particularly for those in seasonal or atypical roles; ensuring they get paid fairly for the holiday they are entitled to.
4. New Parental bereavement law
This is a new piece of legislation.
The Parental Bereavement Leave and Pay Act 2018 was passed by Royal Assent and is expected to come into force in April 2020 via Regulations.
It will give parents and primary carers the right to 2 weeks’ leave if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy. Parents and primary carers will be able to claim pay for this period, subject to meeting eligibility criteria (including 26 weeks’ continuous service).
5. Changes to IR35 rules in the private sector
The IR35 rules apply where an individual (worker) personally performs services for another person (client), through an intermediary (usually a personal service company (“PSC”)). If the services were provided under a direct contract, the worker would be regarded for tax purposes as being “employed” by the client (and so relevant income tax and NICs payable). Currently, it is the intermediary’s responsibility to determine if IR35 applies.
What is changing
From 6 April 2020, the responsibility will shift from the PSC to the end user to determine if IR35 applies. Responsibility for paying/accounting for tax and NICs will shift to the party who pays for the individuals’ services. If IR35 applies, contractors will be taxed PAYE at source. This change is expected to raise £1.1 billion for the Exchequer in its first year.