SECTION 1: Legislation currently in force
Gender pay gap reporting
Employers with over 250 employees must publish details of their gender and bonus pay gap on their website based on a ‘snapshot’ of data from the pay period in which 5 April falls. The last gender ‘snapshot’ date was 5 April 2019 and next gender pay reports are due by April 2020.
National Minimum Wage (NMW) rates
The NMW hourly rates from 1 April 2019 are as follows:
-National living wage (NLW) rate for workers aged 25 and over: £8.21.
-Standard adult rate for workers aged 21 and above: £7.70.
-Development rate (for workers aged 18 to 20): £6.15.
-Young workers rate for young workers aged 16-17: £4.35.
-Apprenticeship rate: £3.90.
National Insurance Contributions
The National Insurance Contributions Bill makes some key changes to National Insurance Contributions (NICs) applicable from April 2019. NICs must be now be paid on termination payments over £30,000.
From 6 April 2019, employers are required to show the number of hours worked on payslips where the worker’s pay varies. In addition, itemised payslips must now be issued to all workers, not just employees.
From 6 April 2019, the maximum level of penalty an employment tribunal is able to order in respect of an employer’s aggravated breach of employment law increased from £5,000 to £20,000 (for breaches of workers’ rights that take place on or after 6 April 2019).
Corporate governance and reporting
The Companies (Miscellaneous Reporting) Regulations 2018 amend reporting requirements for some companies, introduce compulsory reporting on employee and stakeholder engagement/information on the ratio between the CEO and average staff pay. The Regulations also require large private and public companies to include in their strategic report a statement explaining how the directors have had regard to the matters in section 172(1)(a) to (f) of the Companies Act 2006 when performing their duty to promote the success of the company. These Regulations take effect for financial years beginning on or after 1 January 2019 meaning that the first pay ratio reports will fall to be published in 2020.
SECTION 2: Changes due to take effect from April 2020
Written statement of terms and holiday pay
From April 2020, a written statement of terms must be provided to staff on the first day of employment, rather than within the first two months. The information that must be provided will also be increased.
Holiday pay calculation reference period
From April 2020, the reference period for calculating an average week’s pay (for the purposes of calculating statutory holiday pay for employees who don’t have normal working hours) will increase from 12 weeks to 52 weeks. This will protect workers with no normal working hours and whose pay therefore fluctuates.
Right to a written statement of terms for all workers
From April 2020, the Employment Rights (Miscellaneous Amendments) Regulations 2019 (SI 2019/731) will extend the right to a written statement of terms to all workers.
Off-payroll working in the private sector – IR35 reforms
From April 2020, the current IR35 rules will be reformed for ‘off-payroll’ working in the private sector. The end-user client will be responsible for determining the tax status of contractors/freelancers who work through an intermediary company and also for deducting PAYE and NICs where applicable.
Information and consultation arrangement requests
From April 2020, the Employment Rights (Miscellaneous Amendments) Regulations 2019 lower the threshold required for a request to set up information and consultation arrangements from 10% to 2% of employees, subject to the existing minimum of 15 employees.
From April 2020, the Agency Workers (Amendment) Regulations 2019 will remove the ‘Swedish derogation’ from the Agency Workers Regulations 2010 to give agency workers a right to pay parity with direct employees after 12 weeks.
The Parental Bereavement (Leave and Pay) Act 2018
From April 2020, all employed parents will have a day-one right to two weeks’ leave if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy.
SECTION 3: Watch this space!
New statutory code of practice on sexual harassment
The government has announced that it intends to develop a new statutory code of practice on sexual harassment. It is also considering the possible extension of time limits in sexual harassment claims from 3 to 6 months.
Cap on public sector exit payments
The government is consulting (until 3 July 2019) on draft regulations and guidance to implement its plan to impose a cap of £95,000 on public sector exit payments. Subject to certain exceptions, the proposed exit payments that will be subject to the cap include redundancy payments, severance payments, ex gratia payments, payments to reduce or eliminate an actuarial reduction to a pension on early retirement, payments in lieu of notice that exceed one quarter of the employee’s annual salary or any other payment made in consequence of termination of employment.
Ethnicity pay gap reporting
In October 2018, the government launched a consultation on mandatory ethnicity pay gap reporting. The government’s response to the consultation is awaited. If implemented, it is likely to follow the same overall framework as gender pay gap reporting.
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