2020 will see a big upgrade to workers’ rights. Staff contract laws will get tougher, holiday pay rules will change, and sick pay is likely to increase.
In fact, there are seven major laws that are going to affect you in 2020. Here’s what to do now to protect your business…
1. Writing contracts will get harder
Currently, you have up to two months after your employee’s start date to give them a written contract.
But from 6th April 2020, you need to give all workers—as well as employees—a written statement of main terms and conditions from day one. That’s the day they start working for you.
And it’s not just the time frame that’s changing. You need to put much more info into your workers’ contracts, too. This includes:
- How long the job will last
- The length of the notice period
- Your rules on sick leave and pay
- Info on paid leave entitlements
- The length and conditions of your worker’s probation period
- Specific days and times that staff need to work
Remember, if you don’t provide contracts in time or include the right information, workers have the right to take you to an employment tribunal.
To find out more about how new contract laws affect you, contact our employment law helpline on 0800 028 2420.
2. How you calculate holiday pay will change
The government is extending the holiday pay reference period from 12 to 52 weeks. So, where worker’s pay varies from pay packet to pay packet, you need to base your staff’s holiday pay on their average weekly earnings for the whole year.
For example, say your zero hours worker earns different amounts every week dependent on demand. You would normally calculate their holiday by taking an average of pay the 12 weeks before their holiday. For any holidays taken from 6th April 2020, you will need to look at the average taken over the previous 52 weeks.
Holiday pay calculations are rarely straight forward. If you need help, contact the Peninsula payroll advice line on 0800 028 2420.
3. The National Minimum Wage will likely go up
The government revises the National Minimum Wage (NMW) every April, so your minimum wage workers will likely get a pay boost.
If you hire workers on NMW, then your costs could go up. It’s worth looking at your pay policies ahead of time to keep your overheads under control.
For example, you could reduce paid overtime, review any planned pay rises, and think about using flexible contracts for new staff.
4. Maternity, paternity and sick pay may also rise
As with the National Minimum Wage, the government revises maternity, paternity and sick pay every year. All these are likely to increase, although it’s hard to predict by how much.
Make sure you stay up to date with changes to statutory leave rules so you don’t accidentally under or overpay staff.
5. Staff get the right to parental bereavement leave
From April 2020, workers will get the right to two weeks of paid bereavement leave following the death of a child under the age of 18.
Remember, that’s the statutory minimum. You may choose to offer more paid leave after traumatic life events or give staff professional bereavement support.
6. Agency workers will get equal pay
From April 2020, you can’t use Swedish derogation contracts for agency workers.
That means you need to give agency workers the same pay as regular staff after they’ve worked for you for 12 weeks.
This could have a big effect on some sectors, particularly the recruitment industry. So if you use long-term agency workers, your staff costs may increase.
7. Agency workers to get ‘key facts’ pages
The government has ruled that, if you run a temporary work agency, you need to give agency staff a key facts page before they start working for you.
A key facts page should be a one or two-sided document covering information such as:
- The name and address of your business
- The expected rate of pay
- The type of contract you’ll have with your worker
- How much holiday leave and pay you give your workers
A key facts page isn’t a contract, so you don’t need to go into too much detail. But it will be a statutory right, so you have to write one to hire new agency staff after April 2020.
Prepare now to avoid paying later
Many of the new laws coming in 2020 will add pressure on you and your business. Some may even increase your staff costs.
As always, the best way to cope with change and keep your overheads down is to prepare early.
Make sure you update new staff contracts in time for April. Be ready to give workers a copy of their main terms and conditions from day one of employment.
Check the impact that hikes in workers’ pay will have on your outgoings. If you’re likely to take a big financial hit, look at ways to manage staff costs. Think about limiting overtime, take steps to reduce staff sick leave and consider using flexible staff contracts.
And most importantly, make sure you stay on the right side of the law. Every year, employment tribunals punish thousands of UK bosses for making simple HR mistakes.
The good news is if you’re a Peninsula client, our employment law and HR team will do all of this for you.
We prepare your staff contracts, write your HR policies, help to update your payroll, and give you expert advice on how to keep staff costs down.
If you’re not a Peninsula client and would like to find out how to reduce the pressure on your business, speak to one of our experts. Please call 0800 028 2420.