From April 2020, new employment laws hit your business.
The rules around how you issue staff contracts have expanded. The way you calculate holiday pay for some workers has changed. The National Minimum Wage has shot up. And that’s just the start…
Read on to find out how to meet the new laws, and what to do if you miss the deadlines.
Changes to staff contract rules
Some of April’s biggest legal changes come from the Good Work Plan, which the government has called the “largest upgrade in workers’ rights in over a generation”. This includes new rules on how you issue statements of main terms and conditions (SMT).
An SMT is a written document that you must give to your staff when they start working for you.
It’s not technically an employment contract, but it is a legally binding agreement that covers an employee’s main terms and conditions.
From 6th April 2020, the laws around SMTs change in three important ways:
- You need to give your employees a written statement from day one of employment.
- You need to include more information in the written statement—including details about paid absence and the specific days and times your employee must work.
- You need to give SMTs to workers.
This is a complicated area of employment law, and we don’t have space in this article to do it justice. It’s much easier to explain what you need to do over the phone, so please call us on 0800 028 2420
Holiday pay overhaul for some workers
Thanks to another Good Work Plan law, giving holiday pay to workers with varied hours may get more complicated—and more expensive. Here’s why…
When an employee on a fixed-hours contract takes annual leave, you give them the same weekly wage as if they were at work. So, if you pay your worker £400 a week while they’re at work then you pay them £400 a week while they’re on holiday.
But for workers with varied hours, whose pay packets vary from week to week, working out holiday pay is less straightforward.
Until 6th April 2020, you calculate holiday pay based on your worker’s average weekly wage over the previous 12 weeks.
But from 6th April 2020, you calculate holiday pay based on your worker’s average weekly wage over 52 weeks. If they have less than 52 weeks of service, then you base their holiday pay on their average weekly wage for the whole time they’ve worked for you.
For your workers, this means more consistency in holiday pay. The new law averages out peaks and troughs in working hours caused by busy or quiet periods.
But for you, it means that your workers’ holiday pay might go up. That’s because their average pay will always include your busiest time of year.
And it also means that you need to keep an accurate record of your workers’ hours over the entire year.
You can do this by manually recording start and finish times every day, or much more easily with online tools like BrightHR.
National Minimum & National Living Wage hike
It’s not just the Good Work Plan that hits this April.
The government has also announced new National Minimum Wage and National Living Wage rates—promising the “biggest cash increase ever” for UK workers.
Here’s the breakdown of the new rates, which apply from the 1 April 2020:
- £8.72 per hour for workers aged 25 and over (up from £8.21 per hour)
- £8.20 per hour for workers aged 21 to 24 (up from £7.70 per hour)
- £6.45 per hour for workers aged 18 to 20 (up from £6.15 per hour)
- £4.55 per hour for workers aged under 18 (up from £4.35 per hour)
- £4.15 for apprentices aged under 19 (up from £3.90)
The minimum rate of pay varies for apprentices aged 19 and over. After the first year of apprenticeship, you need to increase your apprentice’s pay to the National Minimum Wage for their age group or the National Living Wage if they’re aged 25 or over.
Meanwhile, Statutory Sick Pay is set to go up to £95.85 per week and the rates for Statutory Maternity, Paternity, Adoption and Shared Parental Pay are set to rise to £151.20 per week.
And that’s not all…
As part of the Good Work Plan, new laws give agency workers extra rights and make it easier for employees to demand ‘information and consultation arrangements’ at work.
Plus, the government has recently changed the rules around bereavement leave. Parents that lose a child under 18 or suffer a stillbirth from 24 weeks of pregnancy now get at least two weeks leave, paid subject to qualifying criteria.
In short, this April sees a major boost to protections for workers, and it’s no lie that big legal changes bring big risks to businesses.
Each of the laws mentioned in this article is a ‘statutory right’. That means if you break them, even by accident, your worker or employee can take legal action against you at a tribunal or a civil court.
The best way to protect yourself is to make sure your processes, policies and payroll are up to date in time for April. And if you miss the deadline, it’s important to bring your business onto the right side of the law as quickly as possible.
For expert advice and guidance on how to meet the new laws and protect your business, call Peninsula today on 0800 028 2420.