Changes to Employment Laws under The Good Work Plan from 6th April 2020

Changes to Employment Laws under The Good Work Plan will come into effect from 6th April 2020 and will apply to most organisations. It’s important to plan ahead to ensure you comply with the new requirements. Here’s a summary of the key changes.

Written Statement of Terms

All workers (including employees) starting work on or after 6th April will be entitled to a written Statement of Main Terms (SMT) on or before their first day of employment. This statement should include all key terms such as:

  • Specific details of the expected days and hours of work (if this will vary it must state this)
  • Paid leave entitlement (including conditions of sick pay, maternity and paternity pay)
  • Notice to be given by either party to terminate the contract
  • All benefits comprising ‘pay’ (vouchers, health insurance, food, accommodation etc)
  • Probationary periods

Swedish Derogation

Agency workers will benefit from the abolishment of the Swedish Derogation. Once agency workers have satisfied their 12-week qualifying period, they will now be entitled to equal pay to workers employed directly by the business. Any workers who were previously under Swedish Derogation will need to be provided with written notification that it is no longer applicable.

Holiday Reference Period

To prevent inconsistent holiday payment due to seasonal variations, The Working Time Regulations’ reference period for determining an average weeks’ pay will increase from 12 to 52 weeks.

This applies to all workers except those in their first year of employment where it will be calculated over the number of complete weeks they have been employed for.

Parental Bereavement Act

The Parental Bereavement Act has been introduced to support bereaved parents with leave following the loss of a child. From April 2020, all employed parents will have a right from day one of employment to 2 weeks statutory leave in the unfortunate circumstances of the death of a child under the age of 18 or a still birth after 24 weeks of pregnancy. Bereaved parents with more than 26 weeks of continuous service will be entitled to statutory parental bereavement pay, otherwise it will be unpaid leave.

IR35 and Off-Payroll Rules

For medium and large businesses, the tax legislation IR35 will be extended to the private sector. The responsibility for accounting for tax and national insurance will now lie with the end user – the person who pays for the individual’s services. Businesses will need to review current arrangements with off-payroll workers, internal systems and policies.

National Minimum Wage and Living Wage

The rates for the National Living Wage and the National Minimum Wage increase every April.

The National Minimum Wage applies to anyone of or above school leaving age. The revised changes from April 2020 are as follows:

Under 18: increasing from £4.35 to £4.55

18 to 20: increasing from £6.15 to £6.45

21 to 24: increasing from £7.70 to £8.20

The National Living Wage applies to workers over 25 and will increase from £8.21 to £8.72.

Apprentices are entitled to the apprentice rate if they’re under 19 or in the first year of their apprenticeship. This was previously £3.90 and will now increase to £4.15. Apprentices over the age of 19 who have completed the first year of their apprenticeship are entitled to the minimum wage for their age.

Most businesses will have to make some changes, especially if you employ agency staff or shift workers. You may need to amend contracts, consider your relationship with agency workers, and change how you calculate holiday pay.

If you would like support with any of the employment law changes, please get in touch.