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Your Guide to 2020/21 Employment Law Updates

 
 
PDF Download for our guide to 2020 Employment Law Changes



With April 2020 just around the corner, now is the time to start reviewing your HR practices to ensure your business is compliant with this year's updated legislation.

To help you along with this, we've compiled the key changes into a handy PDF guide, including details on national minimum wage, contracts of employment, worker rights, statutory pay and the controversial updates to IR35 rules.

You can download the document by following the link above. If you have any questions or queries, please don't hesitate to contact one of the team.

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Your Guide to 2020/21 Employment Law Updates


National Minimum Wage (6th April)


Age 2019 2020
Workers aged 25 or over £8.21 per hour £8.72 per hour
Workers aged 21 to 25 £7.70 per hour £8.20 per hour
Workers aged 18 to 20 £6.15 per hour £6.45 per hour
Workers aged 16 to 17 £4.35 per hour £4.55 per hour
Apprentice rate £3.90 per hour £4.15 per hour


Parental Bereavement Pay & Leave

Expected to come into force from April 2020, this legislation will give all employed parents and primary carers the day one right to 2 weeks of leave if they lose a child under the age of 18. The same applies to parents who suffer a stillbirth from 24 weeks of pregnancy.

Paid leave must be offered to parents and primary carers who have been employed for a continuous period of 26 weeks or more and have earned above the lower earnings limit for 8 weeks prior to when the child dies. Workers that do not meet these requirements are still entitled to a minimum of 2 weeks unpaid leave.

ICE (Information and Consultation of Employees) Regulations

Current legislation states that if at least 10% of employees request an agreement regarding the sharing of information and consultation within the workplace, the employer must comply with this right. From April 2020, this percentage will be reduced to just 2%.
 

Written Statment of Employment Particulars

All employees and workers, who are employed on or after 6th April, will be entitled to a written statement of particulars on or before their first day of work, rather than within 2 months as is currently the case.

This means employers will be required to prepare the documentation during the recruitment process and must consider who qualifies as a worker as well as who qualifies as an employee.

In addition, also on the  6th April 2020, written statements of particulars must include:

  • Hours and days of work (and if employees will have to work Sundays, nights or overtime)
  • Holiday and paid leave entitlement
  • Details of any probationary period
  • Details of any other benefits 
  • Details of training provided by the employer.


Existing employees can request an updated statement of terms, which will need to be provided within one month of the request.

Agency Workers' Rights

The Swedish Derogation, also known as the 'pay between assignments' exception' is to be removed from the Agency Worker Regulations 2010. This loophole allowed for agency workers to be paid less than their permanent counterparts after 12 weeks of working on the same assignment.

In addition, all agency workers will be entitled to a key information document which clearly sets out key information on the employment relationship and the terms and conditions with the agency, to include:

  • The type of contract
  • The minimun expected rate of pay
  • Details of deductions and fees
  • A clear statement of remuneration

Holiday Pay Calculations

The reference period for calculating a ‘week’s pay’ for holiday pay is being changed from 12 weeks to 52 weeks.  This applies to workers who have no normal working hours or for those where the amount of pay varies.

IR35

Who do IR35 rules apply to?

IR35 currently only applies to the public sector, but will soon affect contractors providing services for medium or large-sized organisations in the private sector and third sector as well.

Medium-large organisations are defined by a turnover of more than £10.2 million, a balance sheet total of £5.1 million and/or more than 50 employees.


'Off-payroll rules'

IR35 was introduced 20 years ago by HMRC in an effort to combat ‘disguised employment’, meaning a contractor works through a limited company when, in all but name, they are an employee.

The contractor benefits from the tax efficiency that comes with being self-employed, while the employer benefits by not having to pay National Insurance or provide employee benefits.


Inside or Outside?

From April 6th, employers will be responsible for deciding whether individuals providing services to the organisation are ‘inside’ or ‘outside’ IR35.

Although these changes are set to take affect in April, there is a government review into the implementation of the changes.  This review is due to complete soon and we will inform you of any further updates.  In the meantime,  read on for a simple checklist of key considerations when determining employment status.



IR35 Checklist

Control:     
How much supervision and direction a contractor has over their work is a key determination of their employment status. For example, if they are required to work at certain times or given signifiacnt guidance on how to complete the work, this can indicate the individual is an employee.

Substitution:         

Could the contractor send a substitute, or do they need to complete the work themselves? If it’s the latter, they are more than likely inside IR35.
MOO:
This stands for ‘mutuality of obligation’, meaning there is an obligation on both sides to offer and accept work. If this is the case, then it would suggest the individual is an employee.
Exclusivity:
You should take into consideration whether the individual can work for other organisations concurrently. If not, this could mean they are in fact an employee.

Financial risk:   

How much responsibility does the contractor have over their errors? Would they be expected to rectify these any errors in their own time?

Equipment:

Does the contractor use their own equipment or are they provided with equipment by the organisation?

Payment:

Is the contractor paid based on projects orpaid for the hours they work?
Relationship:
Is there a clear client and supplier relationship? If the individual is part of the structure of the organisation, HMRC may see them as an employee.

If you have any queries about the forthcoming changes to employment law, please don;t hesitate to get in touch with one of our CIPD-qualified team.

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