08 April 2020 - Article
During the current coronavirus outbreak employers will have many difficult issues to resolve, including their duties to keep staff safe, when to keep paying staff and for how long and the logistics of managing remote working. We are here to help. If you have any concerns or would like to talk through any issues that may be affecting your business, please do not hesitate to get in touch with a member of our employment team.
In the meantime the usual changes to certain rates and limits in respect of employees, and other changes to employment laws are still coming into effect in April as planned.
Here are the key changes, and the dates of implementation.
National minimum wage
The national minimum wage rates will increase as follows:
- Workers aged 25 or over from £8.21 to £8.72;
- Workers aged 21 to 24 from £7.70 to £8.20;
- Workers aged 18 to 20 from £6.15 to £6.45;
- Workers under 18 from £4.35 to £4.55;
- Apprentices from £3.90 to £4.15.
Statutory rates for family leave
The prescribed weekly rates of Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP) and Statutory Shared Parental Pay (SSPP) will all increase from £148.68 to £151.20. The weekly lower earnings limit threshold below which there is no entitlement to SMP, SPP, SAP and SSPP will be confirmed at a later date.
Statutory sick pay (SSP)
SSP will increase from £94.25 to £95.85 per week. The weekly lower earnings limit threshold below which there is no entitlement to SSP will be confirmed at a later date.
On 13 March regulations came into effect extending SSP to those in self-isolation in accordance with public health advice in response to the coronavirus outbreak. The measure will remain in force for eight months.
On 11 March, also in response to the coronavirus outbreak, the Chancellor announced measures to enable small employers (those with fewer than 250 employees) to recover SSP paid during the first fourteen days of absence. It has also announced proposals to make SSP payable from the first day of absence. The Government has not yet confirmed when either of these measures will come into effect.
Section 1 statements
Employers will be required to provide all employees and workers who start work on or after 6 April 2020 with a written statement of certain particulars of employment (a ‘section 1 statement’) regardless of how long they work for the employer.
- The particulars must be provided in a single document on or before the date on which employment starts – it is now a ‘day one right’; and
- The particulars must contain: the days of the week the worker/employee is required to work; whether hours are variable and how they will be determined; paid leave entitlement; benefits; probationary period and its conditions and duration, if applicable; and training entitlement, if applicable.
- Transitional provisions will apply to workers/employees whose employment commenced on or after 30 November 1993 and before 6 April 2020 (‘existing employees’). If (on or after the 6 April 2020):
- an existing employee requests a section 1 statement, then the employer must provide a compliant statement within one month of the request; or
- there is a change to any particulars of an existing employee’s employment that would be contained in a section 1 statement, then the employer must notify the existing employee of the change, normally within once month.
The reference period used in holiday pay calculations will be increased from 12 weeks to 52 weeks, to make sure that workers with an irregular working pattern throughout the year do not suffer a disadvantage by reason of having to take their holiday at a time of the year when their hours of work and thus weekly pay are lower.
Termination of employment
Where termination takes effect on or after 6 April 2020, tribunal compensation limits increase as follows:
- The maximum amount of ‘a week’s pay’ (for the purposes of calculating statutory redundancy payments and certain other matters) will increase to £538;
- The maximum compensatory award for unfair dismissal will increase to £88,519.
Tax on termination payments
Any part of a payment over £30,000 made on termination of an employee’s employment on or after 6 April 2020 will be subject to employer NICs in addition to the income tax that is already payable.
Parental bereavement leave and pay (‘Jack’s Law’)
From 6 April 2020, employers will be required to offer 2 weeks’ statutory leave to employees who lose a child under the age of 18, or suffer a stillbirth after 24 weeks of pregnancy. The leave can be taken in one block or two separate blocks of one week.
Employees with at least 26 weeks’ service who meet minimum earnings criteria can also qualify for statutory bereavement pay (paid at the same rate as SPP).
Extension of IR35 to the private sector now postponed
The Government has postponed by 12 months the proposal that certain large private sector organisations may be liable for PAYE and National Insurance on the fees paid to individuals who are working for them through a Personal Service Company (‘PSC’). The rules will now come into effect in April 2021 and will apply to all employers with more than 50 employees, an annual turner over £10.2 million and a balance sheet worth over £5.1 million.
For further information or advice on any of the above changes, please contact a member of our employment team for guidance.