It’s that time of year again folks… On April 6th a raft of new employment legislation comes into effect and its vital for all businesses to up to speed.
Here’s a summary of the new (and potential) legislative changes coming into place this spring:
- Increase in National Minimum Wage (NMW) rates – Having been announced as part of the 2018 Budget, both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase in April 2019. Under the new NLW, the minimum hourly rate that workers aged 25 and over are entitled to will increase from £7.83 to £8.21. At the same time, the NMW rate for workers aged between 21-24 will increase from £7.38 to £7.70 an hour; the rate for 18-20 year olds will increase from £5.90 to £6.15 an hour and those over compulsory school age but not yet 18 will experience an hourly increase from £4.20 to £4.35. The minimum rate for apprentices will also increase from £3.70 an hour to £3.90 an hour, providing the apprentice is under the age of 19, or 19 and over but in the first year of their current apprenticeship.
- ‘Settled Status’ for EU nationals – European workers currently living in the UK will be able to apply for settled status in 2019, allowing them to remain indefinitely in the UK following the end of the Brexit transition period in 2021. To be granted settled status individuals must be able to prove they have been living in the UK for 5 years by the date of application. Those who do not meet this requirement can apply for temporary status, allowing them to remain until they have accrued enough residency to be granted settled status.
- An increase to auto-enrolment contributions – From April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Currently, automatic enrolment requirements mean employers must contribute a minimum of 2% of an eligible workers pre-tax salary to their pension pot, with the individual contributing 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively. Employers are reminded to allow appropriate time to consult with staff before making any changes to their pension contribution scheme.
- Payslips for all workers that include all hours worked – Changes to the way employers issue payslips will also come into force on 6th April 2019 as from this date onwards the legal right to a payslip will be extended to include those who are recognised as ‘workers’. Employers will also be obliged to include the total number of hours worked on payslips for employees whose wages vary depending on how much time they have worked. It is important that employers work with their payroll departments to ensure the correct procedure is in place ahead of April’s deadline.
- A decision on National Minimum Wage for ‘sleep-ins’ – Following 2018’s Court of Appeal decision on Mencap v Tomlinson Blake, a precedent was set that individuals working on sleep-in shifts, such as nurses and care workers, would not be entitled to national minimum wage (NMW) for time spent asleep in scenarios where they were ‘available for work’ and not ‘actually working’. A request to appeal this decision was lodged with the Supreme Court by Unison and a decision is expected in 2019 as to whether this case will be analysed further. Any ruling in 2019 will be important in defining the rights of thousands of staff currently working sleep-in shifts.
- Gender pay gap reporting for some medium-sized companies – Private organisations with 250 or more employees will again be required to publish their gender pay gap figures on the 4th April 2019. Although employers will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in 2018 have been successful.
- CEO pay gap reporting for some medium-sized companies – New legislation will also come into force in 2019 that requires companies with more than 250 employees to publish their executive pay gap. Although the first reports are not expected until 2020 businesses should be calculating the necessary figures throughout 2019 to show the gap between the total amount paid to their CEO and the average pay for an employee.
- The legality of micro-chipping employees may be questioned – If recent news stories are to be believed the act of micro-chipping employees may become more common in the UK workplace during 2019. The UK legal system has not yet been challenged in this regard, however it will be interesting to see how a court decides to rule on microchipping staff given the potential invasion of privacy and GDPR implications.
- The use of non-disclosure agreements with employees might be limited – The government have brought forward a review into the use of non-disclosure agreements in the workplace, with a response expected in 2019. These agreements, otherwise known as gagging clauses, were originally used to protect intellectual property when employees moved from one company to another. However, recent media coverage has highlighted the fact that they are often used to silence claims of harassment and bullying. Whilst these agreements remain legal, the government’s response may go some way to deciding how they can be used in the future.
- Statutory family and sick pay rate to increase – The weekly amount for statutory family pay rates is expected to increase to £148.68 for 2019/20. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. The increase normally occurs on the first Sunday in April, which in 2019 is 7 April. The weekly rate for statutory sick pay is expected to increase to £94.25 from 6 April 2019.
- Parental bereavement leave and pay on the horizon – The government has confirmed that it intends to introduce a right for bereaved parents to take paid time off work. Under the current proposals, bereaved parents will be able to take leave as a single two-week period, as two separate periods of one week each, or as a single week. They will have 56 weeks from their child’s death to take leave. The new right is expected to come into force in April 2020, but employers should start preparing for it during 2019, and could decide to introduce their own bereavement leave policy if they don’t already have one.
- The National Insurance Contributions Bill comes into place – effective from April, it will introduce some key changes to National Insurance Contributions (NICs). Including:
- NICs must be paid on termination payments over £30,000
- Class 2 NICs will be abolished
For further help or advice on how the new legislation might affect your business drop us a line at email@example.com or give us a call on 0203 627 7048.