As with the turn of any new financial year, there have been a number of updates and additions in the field of employment law.
National Minimum Wage Increase from 6th April 2020
A new financial year invariably leads to a national minimum wage increase. As of 6th April, the following rates apply:-
- 25 years and older – £8.72 (an increase of 50 pence);
- 21 to 24 years – £8.20 (an increase of 50 pence);
- 18 t0 20 years – £6.45 (an increase of 30 pence);
- Under 18s – £4.55 (an increase of 20 pence); and
- Apprentices – £4.15 (a 25 pence increase).
Changes to the Provision of Written Employment Particulars
As of 6th April 2020, all workers and employees must be provided with a written statement of employment on or before their first day of employment.
This change puts the onus on the employer to issue the statement earlier than currently required (previously employers were allowed two months to issue the statement).
New written statements must also include further particulars than is currently required, including points such as:-
1 The hours and days of the week the worker or employee is required to work, and if those hours or days can be varied;
2 Details of any probationary period that the worker or employee is subject to;
3 The worker or employee’s entitlements to paid leave, if any; and
4 Any other benefits not specifically covered elsewhere in the written particulars.
Parental Bereavement Leave and Pay
From April, the new Parental Bereavement and Pay Act 2018 comes into force and introduces a right to two weeks leave for parents that have lost a child under the age of eighteen or suffer a stillbirth from 24 weeks of pregnancy.
Bereaved employees with a minimum of 26 weeks continuous service will be entitled to receive a statutory parental bereavement pay and those with less than 26 weeks continuous service will be entitled to two weeks of unpaid leave. They can take their leave in either one two week block or two separate blocks of one week. The leave must be taken within the 56 days following the date of the child’s death.
Further details of those who will qualify for this entitlement will be set out in separate Regulations.
Adjustment of Holiday Pay Reference Period
Currently, the calculation of holiday pay is complicated, particularly for those workers or employees with variable hours and variable rates of pay. The holiday pay reference period is currently 12 weeks.
From 6th April 2020, the reference period is increased form 12 to 52 weeks. As such, employers must look back over 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 employee’s average weekly pay.
This change should even out the fluctuation in pay for workers, particularly those in the seasonal sector.
Changes to Redundancy Payments
The maximum weekly pay amount for redundancy payment calculations will increase from £525 to £538.
Previously, where an ex gratia payment was made upon the termination of employment (on top of notice pay) the first £30,000 could be paid free of income tax, with only the amount above being subject to tax. The entire payment was, however, exempt from national insurance contributions.
From 6th April 2020, the first £30,000 of an ex gratia payment (including any redundancy payment) will continue to be free of income tax and national insurance contributions. However, any amount above that will now be subject to Class 1A employer national insurance contributions. This should be borne in mind when deciding on the level of the ex gratia payment.
For more information on any of the employment law changes mentioned in this post, please contact the Employment Law Team at email@example.com or through the website.