With the never-ending COVID-19 discussions and the economic pressures now placed on businesses nationwide, it is easy to forget that April 2020 saw a multitude of changes to working practices in line with the Good Work Plan.
Now more so than ever, it is imperative that you remain compliant with the law to prevent an Employment Tribunal or HMRC inspection.
- National Minimum/Living Wage increasing
The National Living Wage, applying to all those aged 25 and over, has increased from £8.21 to £8.72 per hour. Increases have also been made to the National Minimum Wage rates.
ACTION: Ensure that all workers are being paid the age appropriate minimum wage. Non-compliance can result in a large HMRC liabilities of up to £20,000 per worker and employers being placed on HMRC’s “naming and shaming” list.
Review all deductions that you make to employee’s pay. Could you be mistakenly breaching the minimum wage and putting yourself at risk of penalties and being named and shamed?
- Swedish Derogation contracts
Swedish derogation contracts, also known as ‘pay-between-assignment’ or Regulation 10 contracts have been abolished. Workers engaged on these contracts will automatically revert to the right to pay parity.
ACTION: Ensure your existing contracts are up to date and no longer reference opting out of pay parity. Any workers currently engaged on a Regulation 10 contract will need to be made aware of the changes by 30th April 2020 and you should reviewing whether pay rates need to increase after a worker has completed 12 weeks on the same assignment. Have you communicated with the workers and your clients?
- Holiday pay reference period
The reference period for calculating average weekly pay appropriate to payment of holiday pay is extended from 12 weeks to 52 weeks.
ACTION: Ensure that processes are updated to include 52 weeks of pay data rather than 12 when calculating a worker’s holiday pay. Failure to do so could result in an employment tribunal claim.
- Key Information Document
An employment business must give work-seekers a Key Information Document (KID) which clearly sets out certain key information concerning their relationship. This document must be provided before the business reaches an agreement on terms with that person.
DID YOU KNOW? Failure to comply with regulation 13A of The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 (or any other regulation) could result in an inspection from the Employment Agency Standards Inspectorate (EASI) and/or an employment tribunal claim.
- Statement of terms
All workers (and not just employees as previously) now have the right to a written statement of particulars of employment which must be given prior to, or on commencement of employment.
ACTION: If you haven’t done so already, you should update your recruitment procedures to ensure that all new workers receive a statement of terms on the first day of work.
Further new legislation dictates what extra details must be included within the statement of initial employment particulars – have you updated your contracts?
- Paid Parental Bereavement Leave
This a new entitlement for bereaved parents to be absent from work, normally with pay at a statutory minimum rate, for up to two weeks.
DID YOU KNOW? Primary carers – not just parents – are now entitled to at least two weeks leave following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy.
ACTION: Family Friendly Policies must be updated to reflect this change.
- Taxation of termination payments
Tax and National Insurance Contributions (NICs) will now apply to these termination payments above £30,000.
There has been a long delay in this being implemented in law, so it is imperative that employers are aware that tax and NICs now apply to these termination payments in order to avoid receiving a liability and an additional fine from HMRC.
Aspire have updated our statutory rates card to reflect the new 2020/21 rates. Remember, you can download our statutory rates card here.
You still have time to prepare…
Unlike the above changes which have already come into force, you have a while longer to prepare for;
- Reverse charge VAT in construction – this takes effect from 1 October 2020
- Off-payroll working rules being extended into the private sector – set to take effect from 6 April 2021 (postponed from 6 April 2020 due to pressures of COVID-19)
But don’t leave it too late! It is time to get your processes in order.
If your business is unprepared for any of the above changes, some of which should have been implemented on 6 April 2020 , get in touch today on 0121 445 6178