There are several changes to employment legislation that come into force this year. Here is a brief guide to some of the main changes from 6 April, and details of what you need to do to make sure you remain up-to-date and compliant.
1. Changes to holiday pay reference period
The current process for calculating holiday pay for staff without ‘normal pay’ (so those who, for example, earn commission, bonuses or overtime which varies their pay), is to calculate the employee’s average pay from the previous 12 weeks and to pay them for annual leave based on that average to avoid them being out of pocket when taking holidays.
The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 will increase that period to 52 weeks or the period of time worked if the person has not been with the company for 52 + weeks. This is intended to give a fairer process for calculating average pay as some companies may have busy periods where staff are paid more for a few weeks and then quiet periods where staff receive mostly their basic pay.
If an employee takes leave after a quiet period their average pay over the previous 12 weeks would be lower simply due to the downturn in work, effectively penalising them for taking leave after the quiet period and perhaps encouraging employees to take leave after busy periods when their holiday pay will reflect their recent earnings.
These provisions only apply to staff without normal pay. Someone on a salary working Monday to Friday will be paid the same each month, so there is no need to calculate average pay for annual leave. But for staff who do regular compulsory overtime or shifts, their pay is not the same each month so when taking leave their pay should be an average of their ‘normal’ earnings otherwise they will earn less when they take time off which would disincentivise them from taking the time to rest which is what annual leave is intended for.
2. All workers (casual/zero-hour staff) will have the right to a statement of terms
Right now, workers are not entitled to a statement of terms as the current legislation applies to employees. However, from 6 April this will be extended to include workers which means companies will need to provide their casual or zero-hour staff with a statement of the terms they are working under.
Some companies may have been doing this for a while anyway, but it will become a legal right this April.
3. All employees and workers are to be given a written statement of terms on or before the first day of work
The employment rights act currently requires employers to provide a statement of particulars of employment within two months of a person starting work. From April this will be due on or before their first day.
Employers should check all staff have a statement of particulars (or contract) and if anyone doesn’t have one, make sure this is provided asap.
The statement of terms must also include additional information. From April employers will be required to also set out:
- the days of the week the worker is required to work, whether the working hours may be variable and how any variation will be determined;
- any paid leave to which the worker is entitled;
- details of all remuneration and benefits;
- any probationary period; and
- any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.
If you think your contracts/statement of terms will not comply with these new requirements, contact us for a review and update of your HR documents.
4. All settlement payments above £30k with being subject to employer National Insurance Contributions
This is another of the changes made to settlement agreements and the payments involved over the last two years. From April the amount of compensation paid by an employer which is over the £30k threshold will be subject to employer NI contributions.
Employers should take this into account when considering settlements and compensation payments as the overall package may not be as commercial as it once was.
5. Parental Bereavement Leave will be introduced (detail subject to final regulations)
We would hope that in the terrible event an employee loses a child that an employer would allow that person to take paid time off work to deal with the aftermath and to grieve. However, as it is not a legal requirement to allow paid time off and the current position is to allow ‘reasonable’ time off for dependants, the government is introducing a minimum paid period of bereavement leave for parents.
This is set to commence from April but the regulations providing the full details and definitions are yet to be provided by the government. The headline terms are that staff will be entitled to two weeks off which will be paid at a statutory rate (similar to statutory maternity pay).
The employee will be able to take the leave in two full week blocks or one week and then another week as long as they are taken within 56 weeks of the death.
In addition, the employee won’t need to give notice if the time is taken in the aftermath of the death but if they wish to split the time and take a week (or both weeks) at a later date, the employee will need to give the employer one weeks’ notice.