Are you ready? Six key changes in Employment Law in 2020

This year will see key changes being implemented in UK Employment Law, affecting both employers and employees. So, it’s important that both are aware of these changes and are ready for them.

Here, we share the six changes that are likely to have the most impact:

  1. Changes to the rights of agency workers

Under the current Agency Worker Regulations 2010, agency workers are entitled to receive the same pay and basic working conditions as a direct recruit, once they have completed 12 weeks of continuous service working in the same role.

The ‘Swedish derogation’ provision currently provides an exemption to the right of equal pay, provided agency workers are employed under a permanent contract with a temporary work agency and are paid by the agency for periods between assignments. In short, an agency can elect to utilise this option provided they are prepared to pay employees between assignments. If this option is chosen, then it stops agency workers being able to enforce their rights to equal pay etc, once they have completed the 12-week qualifying period.

From 6 April 2020, the Swedish derogation will be removed and the below rules will apply.

Once agency workers have satisfied the 12-week period, they will be entitled to equal pay to workers who were engaged directly.

  1. Calculation of holiday pay

Under current law, calculating holiday pay can be tricky and complicated. This is particularly true for workers with changeable hours and variable rates of pay. Currently, holiday pay is calculated using a reference period of 12 weeks.

From 6 April 2020, that reference period will increase from 12 weeks to 52 weeks.

This means employers will have to look back at the previous 52 weeks to work out a worker’s average weekly pay. The idea behind this is it should give a fairer reflection of a worker’s average pay by using a longer reference period.

  1. Parental bereavement leave

This is a new right that is due to be introduced on 6 April 2020; however, it has not yet been confirmed.

This new right, if it does come into force, will allow bereaved parents to have a right of two weeks leave following the loss of a child under the age of 18, or a still birth after 24 weeks of pregnancy.

They will be entitled to take bereavement leave in one two-week block, or, in two separate blocks of one week.

There will be time limits on when the bereaved parents must take the leave by, if they wish to do so.

Finally, if the employee affected has more than 26 weeks’ continuous service, they will be entitled to receive statutory parental bereavement pay. Those with less than 26 weeks’ service will be entitled to take two weeks of unpaid leave.

  1. Employees will be entitled to a written statement of terms from day one of employment

Currently, employees must be provided with a statement of written terms of employment within two months of commencing employment. A statement of written terms is essentially a short version of an employment contract. Most employers will more commonly be used to providing a contract of employment to new employees, shortly after they start work.

From 6 April 2020, all employees and workers will have the right to a written statement of particulars from their first day of employment, rather than after two months. Furthermore, additional information will have to be included as part of this extension.

Employers need to be aware of this and prepare for the same at this early stage, so they are ready when the new right is implemented.

  1. Changes to IR35 rules in the private sector

Currently, the law provides that where an individual personally performs services for another through an intermediary, and if the services provided are under a direct contract, the individual would be regarded for tax purposes as being employed by the end user who is the client. Presently, it is the responsibility of the intermediary (which is usually a personal service company) to determine whether IR35 applies.

From 6 April 2020, this will change.

The new rules will apply to medium and large businesses in the private sector only and largely mirror the changes that took effect in the public sector in 2017.

Under the new law, all contracts entered into or payments made on or after 6 April 2020, the onus will shift from the intermediary (the personal service company) in determining whether IR35 applies, to the end user (client) to make a decision on the status of the worker/individual.

In anticipation of this, it is essential that medium and large businesses carry out assessments to determine whether the new IR35 rules will apply to their contractors and review contracts and arrangements accordingly.

Small businesses will not be affected by this change.

  1. National Living Wage will increase.

On 1 April 2020, National Living Wage will rise from £8.21 to £8.72 for workers over the age of 25. This marks a significant increase of 6.2%.

Younger workers will also see an increase with 21 to 24-year-olds’ minimum hourly pay rising from £7.70 to £8.20 per hour.

As always, we recommend that early action is best in preparing yourself for these changes. If you require any further advice or assistance with these matters, please do not hesitate to contact us.