What companies need to be aware of in 2020 with changes to Employment Law

The General Election is now a distant memory and the new Government’s focus shifts towards working to enable a swift and successful Brexit. The Chancellor of the Exchequer, Sajid Javid, will deliver the Budget on Wednesday 11 March 2020 and this Budget is the first Budget in recent years from a majority government, and so promises to deliver some meaningful changes as Mr Johnson’s government look to kick off their domestic agenda following the UK’s scheduled departure from the EU on 31 January 2020.

Although the Budget is being widely anticipated from a tax perspective, there has been some changes already announced for Employment Law, which will affect payroll for both employers and employees.

On the 31st December the Government announced that low-paid workers will receive a 6.2% pay rise with a new National Living Wage (NLW) of £8.72 per hour, the biggest cash increase ever. Sajid Javid stated ‘We want to do more to level up and tackle the cost of living, which is why the NLW will increase further to £10.50 by 2024 on current forecasts.’

From 1st April 2020 there will be an

  • Annual pay rise of up to £930 for a full-time worker.
  • National Living Wage (NLW) increasing from £8.21 to £8.72.
  • New NLW rate starts on 1 April 2020 and applies to over 25 years olds.

There are also five other key changes which lie ahead:

  • Changes to the IR35 rules for the Private sector will come into effect on the 6th April
  • Adjustment to the holiday pay reference will come into force on the 6th The change will see the pay reference period increase from 12 weeks to 52
  • Amendments to Agency Worker Rules. Once agency workers have satisfied the 12-week qualifying period, they will be entitled to equal pay to workers who are engaged directly by the employer. Plus, they will be entitled to a ‘key fact statement’ setting out their terms of work
  • All new employees and workers will have the right to a written statement of particulars from their first day of employment and this will come into effect from 6 April 2020,
  • The Parental Bereavement Leave and Pay Regulations, to be known as Jacks Law will be introduced from 6 April 2020. Bereaved parents will have the right to two weeks statutory leave following the loss of child under the age of 18, or a stillbirth after 24 weeks of pregnancy.

These changes could have a significant impact to businesses, so careful preparation before the April deadlines will ensure you’re compliant and covered before these changes come into force.

If you have any questions regarding any other the issues raised in this article, please contact Sarah Ashton – sashton@garbutt-elliott.co.uk or call 01904 464122.