How to prepare for 2020 employment law changes

Paula Bailey, partner and employment law expert, at Howes Percival said there are plenty of changes employers need to prepare for which come into force on April 6, including:

Contracts of employment

All employees and workers will have a ‘day one right’ to a written statement of terms. The statement has also been expanded and contains additional details previously available to the employee in a separate document.

Agency workers

Temporary work agencies will be required to provide agency work-seekers with a key information document, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom. In addition to this, with effect from April 30 2020, the Swedish Derogation provision will no longer apply.

Average holiday pay

The reference period to be used to calculate average weekly pay for holiday pay will be increased from 12 weeks to 52 weeks.

Tax changes

The off-payroll working rules (relating to IR35) are scheduled to be extended to large and medium-sized companies in the private sector. Affected companies will be required to determine the employment status of individuals engaged through personal service companies or intermediaries. They will need to provide that determination to fee payers and workers and adopt a resolution process in the event of disagreement.

They will also be responsible for the payment of tax and National Insurance contributions (NICs) where there is deemed employment. HMRC have developed an online checking tool, the ‘Check Employment Status Tool’ (CEST), which, if completed correctly, they will accept.

Whilst the new rules are scheduled to apply from April 6 2020, the final legislation to introduce these changes remains incomplete and many businesses and professional organisations are calling for the changes to be postponed. However, at this time, the information available indicates that it is likely that the new rules will be implemented as expected.

As a result of the tax changes and the changes to the Swedish Derogation model, many organisations are looking at their resource models going forward.

All termination payments above the £30,000 threshold will be subject to class 1A NICs.

Information and consultation

The threshold to request an information and consultation agreement will be lowered from 10 percent to two percent of the total number of employees.

Parental Bereavement Leave and Pay

This act provides for parents to be entitled to two weeks’ leave and statutory bereavement pay if they lose a child under the age of 18, which includes where a child is still born after 24 weeks. However, the regulations to set out and implement this act, i.e. when it can be taken and safeguards against detriment (redundancy or dismissal) have not yet been published.