In this article, we outline the key changes that could impact your business after 6th April, with actionable tips to get you started.
Key takeaways from this article:
Employees and workers must have a contract from day one
The holiday pay reference period is now 52 weeks, not 12
Bereaved parents qualify for two weeks leave under new law
Agency workers are entitled to equal pay after a 12 week qualifying period
New rates of pay are announced
Termination payments are subject to employer National Insurance Contributions
All new employees and workers must have a contract (written statement of terms) from their very first day of employment. As their employer, you should prepare the contract for them well before their start date to ensure that they have it on their first day of work at the very latest.
Contracts must now also include:
Whether they will be required to work outside the UK
If you will be providing any training (include details around what the training will be and list any funding arrangements).
A list of the ‘family friendly’ leave available.
Any additional benefits available.
Remember: Self-employed contractors (not workers or employees) should have a contract for services in place. Find out more about how we can help with contracts for services.
New Holiday Pay Reference Period
The holiday pay reference period will increase from 12 weeks to 52 weeks. This change should help to even out the variation in pay for workers, particularly those in seasonal roles, for example.
You will need to look back at the previous 52 weeks where a worker has worked and received pay. Discard any weeks not worked or where no pay was received, to calculate the average weekly pay.
No current law exists, but the Parental Bereavement (Leave and Pay) Act 2018 will come into force in April 2020. Bereaved parents will have the right to two weeks of leave following the loss of child under the age of 18, or a stillbirth after 24 weeks of pregnancy.
They will be entitled to take their leave in one two-week block or in two separate blocks of one week. The leave must be taken before the end of a period of at least 56 days beginning with the date of the child’s death.
Look out for separate regulations – these will include further details of the new entitlement and exactly who will qualify.
Remember: Bereaved parents employed with a minimum of 26 weeks’ continuous service will also be entitled to receive statutory parental bereavement pay. Those with less than 26 weeks’ continuous service will be entitled to take two weeks of unpaid leave.
Amendments to Agency Workers Rules
From 6th April 2020, the ‘Swedish derogation’ will be abolished.
Swedish derogation is a model of employment where an agency hires a worker directly, rather than being the middleman between a worker and a client company.
Under the new law, once agency workers have satisfied the 12-week qualifying period, they will be entitled to equal pay to workers who are engaged directly by you.
By 30th April 2020, agency workers who have an existing contract that contains a Swedish derogation provision must be provided with a written notification by the agency that it will no longer have effect.
Any increase in wages will be passed on to the end user with the standard mark up.
Remember: After 6th April 2020 all agency work-seekers must be provided with a key facts statement setting out the terms under which they will undertake the work.
Wage Rates for 2020
The National Minimum Wage and National Living Wage rates change every April. These are the new rates that will be effective from 6th April:
Remember: The hourly rate for the minimum wage depends on an individual’s age and whether they’re an apprentice.
Termination Payments are subject to National Insurance Contributions
From 6th April, termination payments over the sum of £30,000 become subject to employer National Insurance Contributions (NICs). This change was delayed from April 2018.
Remember: Contact us for support with termination payments and settlement agreements.
Preparing for these new regulations and implementing the changes can be both daunting and time-intensive. Our team at Danton has a full understanding of what is required and we’re on hand to support you, whether that be guiding you through the process or helping to ease the load during this transition. Call us today on 01527 306 760.