We recently looked at the confirmed employment law changes which will largely come into force on 6 April 2020. For a summary of the most significant changes for employers, we recommend that you read our Employment Law Changes 2020 guide, which is available on the FSB Legal Hub.
Employment Bill 2019-20
In terms of further likely changes, in the Queen’s speech on 19 December 2019, the government announced that there will be an Employment Bill 2019-20, the key elements of which would be:
creating a new, single enforcement and employment advisory body (taking over, for example, the functions of the HMRC in National Minimum Wage enforcement), thus offering “greater protections” for workers;
ensuring that tips left for workers go to them in full;
introducing a new right for all workers (including zero hours workers where there is no certainty over working hours) to request a more predictable contract after 26 weeks, such as for fixed/guaranteed hours;
extending redundancy protections in terms of the employer’s obligation to offer a suitable alternative role where one exists and where the current role is redundant, from the point an employee notifies her employer of her pregnancy until six months after the end of her maternity leave;
allowing parents to take extended leave for neonatal care; and introducing an entitlement to one week’s leave for unpaid carers; and
(subject to consultation), making flexible working the default unless employers have good reason not to.
It is 3.5 years since the referendum on leaving the EU was held, but the UK is now scheduled to leave the European Union at 11pm on 31 January 2020.
A transition period will apply until 31 December 2020. During the transition/implementation period EU law, immigration and customs rules will continue to apply to the UK. As a result, the UK will not be able to legislate to reduce EU workers’ rights during this period.
The Employment Bill would need to be passed by the end of the implementation period in order to transpose workers’ rights derived from EU law into UK law.
The FSB has produced guidance on its website on Brexit for small businesses and the self-employed, including guidance on employing EU staff after Brexit:
Increase to the National Minimum Wage (NMW) on 1 April 2020
On 31 December 2019, the Government announced that low-paid workers will receive a 6.2% pay rise with a new National Living Wage (NLW) of £8.72 per hour, which was heralded as the biggest cash increase ever to the NLW: https://www.gov.uk/government/news/government-announces-pay-rise-for-28-million-people
From April 2020, the new minimum hourly rates are:
- The NLW for ages 25 and above - £8.72
- The NMW for 21 to 24-year-olds - £8.20
- For 18 to 20-year-olds - £6.45
- For under-18s - £4.55
- For apprentices - £4.15
The Low Pay Commission, which advises the government on NMW and NLW rates, has argued that increasing rates has raised pay for millions without costing jobs, but acknowledges that employers have made a “variety of adjustments to deal with the increases” such as reducing benefits, bonuses and overtime premiums; or passing on the additional costs to customers. Recognising the financial squeeze of rising employment costs on small businesses, the FSB has cautioned that small businesses in sectors with tight margins and which are heavily labour-dependent, such as the care sectors, retail or hospitality will be particularly badly hit without financial support, such as accompanying tax breaks.
The FSB points out, for example that the NMW rate increases also coincide with a 1.7% increase in business rates in April.
The Government has pledged to increase the NLW increase to £10.50 per hour by 2024 “provided economic conditions allow”.
Increase to Statutory Rates on 6 April 2020
The rate of statutory adoption pay, maternity pay, paternity pay and shared parental leave pay weekly rates increase from £148.68 to £151.20.
The rate of statutory sick pay is also proposed to increase from £94.25 to £95.85 on 6 April 2020.
To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit (currently set at £118 per week).
However, the lower earnings limit from April 2020 has not yet been published.
Early May Bank Holiday
This year, the date of the early May bank holiday has been moved from the preceding Monday to Friday May 8 in order to commemorate the 75th anniversary of VE Day. As contracts of employment which set out employees’ entitlement to bank holidays do not specify the actual dates on which the bank holidays fall, employers are not required to inform or consult with staff over the change in date.
However, the impact of the late announcement of the change in date by the government in June 2019 took place after lots of printing companies had already printed their calendars and diaries for 2020 causing significant financial loss for those companies. The British Printing Industries Federation said it welcomed the VE Day honour but said the government should have consulted businesses first.
The FSB echoes this sentiment and has urged the government to ensure that in future, businesses and industry are given as much notice as possible of changes to national holiday dates.