Business owners and HR personnel need to be aware of 2020 changes due to new employment legislation coming into force. Key changes affecting employers are summarised below:
New right to a written Statement of Terms (contract of employment) – 6 April 2020.
Current law is that employees who have been continuously employed for one month or more must be provided with a written Statement of Terms within two months of employment commencing.
From 6 April 2020, all new employees and workers will have the right to a Statement of Written Particulars (contract of employment) from their first day of employment. As this new obligation is to provide particulars on “day one,” employers should begin preparation of the Statement during the recruitment stage and ensure that these include every element of the new requirement.
Consideration will also need to be given as to who may qualify as a worker, ensuring there is a separate document prepared and issued to those individuals as opposed to the employees.
Amendments to agency worker roles – 6 April 2020.
The Agency Worker Regulations 2010 (AWR 2010) entitles agency workers to receive the same pay and basic working conditions as direct recruits once they have completed 12 weeks’ continuous service working in the same role. The ‘Swedish derogation’ rule currently provides an exemption to the right to equal pay, if agency workers are employed under a permanent contract of employment with the temporary work agency and are paid by the agency for periods between assignments.
From 6 April 2020, once agency workers have satisfied the 12 week qualifying period; they will be entitled to equal pay, the same as the workers who are engaged directly by the employer. This essentially removes the “Swedish derogation” rule which provides an exception to the right to equal pay.
On or before 30 April 2020, agency workers whose existing contracts contain a Swedish derogation must be provided with a written notification by the agency that will no longer have a direct effect.
Changes to IR35 rules for the private sector – 6th April 2020
IR35 rules apply where an individual (worker) performs services for another person (client) through an intermediary (usually a personal service company) and the workers would for tax purposes be regarded as being employed by the client. Currently it is the intermediary’s responsibility to determine whether IR35 applies.
From 6th April 2020, for all contracts entered into, or payments made on or after 6 April 2020; the onus will shift from the personal service company to the end user client to make a status determination. In effect, this will now shift to the party who pays for the individual services, known as the fee payer.
It is imperative that employers in the private sector assess their independent contractors and review their contracts and pay arrangements.
Holiday pay “reference period” changes – 6 April 2020
The holiday pay reference period for those with variable hours and variable rates of remuneration is currently 12 weeks.
From 6 April 2020, this will increase to 52 weeks. Employers will therefore be required to look back at the previous 52 weeks where a worker has worked and received pay, discarding any weeks not worked or when no pay was received, to calculate the average weekly pay.
New parental bereavement law effective – 6 April 2020
The Parental Bereavement (Leave and Pay) Act 2018 is expected to come into force in April 2020.
If it does come into force, bereaved parents will be entitled to have to two weeks of leave following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Bereaved parents employed with a minimum of 26 weeks continuous service will also be entitled to receive statutory parental bereavement pay.
As a business owner or HR personnel, you will need to ensure you are up to date on the imminent changes listed above. If you need further advice on any of the points mentioned, our employment law team can help. We offer a range of options for one-off advice as well as ongoing HR support packages. Contact us today on 0845 287 0939 or email us for more information.