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Employment Law – Changes to ...

Employment Law – Changes to look out for in 2019

Gender pay gap reporting and claims of sexual harassment in the workplace made 2018 a very busy year for employment law, and 2019 promises very much the same, as on the 1st day of January brought in new regulations on executive pay reporting. Here is what to look for over the next 12 months.

1st January 2019 – Pay ratios and executive pay reporting

The 1st of January will bring new regulations to quoted companies registered in the UK (as classified by the Companies Act 2006), with more than 250 UK staff in the relevant financial year. They now must make public the pay gap between their regular UK worker and their CEO.

This new obligation affects the financial years beginning on or after 1 January 2019 and the reporting shall take place once a year. Companies affected by the new regulations ought to make sure that steps are taken to collect their data in good time in order to calculate their pay ratios by the 2020 deadline. You can read more on gov.uk press release.

29th March – UK’s divorce from EU | Brexit day

There is still a lot of doubt on how Brexit will impact every UK employee’s life after the 29th of March 2019. This is true, mostly because we don’t really know what the Brexit outcome will be. Whether there is a deal with the EU, or we will have a no deal hard Brexit and rely on World Trade Organization (WTO) trade rules or lastly if a new referendum will again be given to the British people.

The government has however instructed that current workers’ rights will be kept after Brexit. The “Good Work Plan” published by the government last December also debates the planned improvement of rights.

5th April – Gender pay gap reports (private and voluntary sectors)

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) require employers with 250 or more employees in the private and voluntary sectors to calculate and publish on 5 April each year details of their annual gender pay gap.

The first gender pay gap reports were issued in 2018 and the second is eagerly expected by 5th of April 2019. There will be some interest to find out if the published gender pay gap has begun to decrease.

6th April 2019 – Pay slip changes

Present legislation does not require employers to issue payslips to contractors, freelancers, covers agency staff, casual staff, zero hours staff and other types of ‘non-employee’ workers – this situation will change on the 6th of April 2019, with clear consequences for payroll departments across the UK.

Under the new scheme employers will have to issue itemised payslips to every worker on their payroll, not just those classified as ‘employees’. Under the new legislation, payslips must detail:

  • The worker’s gross salary
  • Deductions (National Insurance, Tax, etc)
  • Net salary/wage amount received.
  • A single, combined amount, or
  • An itemised list of hours worked for different rates of pay

It is important that employers ensure payroll procedures are modified to collect the new information needed ahead of April’s deadline.

6th April – Good work plan: employers’ penalties for contract breaches

The government “Good Work Plan” is their last reply to the recommendations from the Taylor Review, published in July 2017.

In December 2018, the Good Work Plan’ was finally published by the government and made a commitment to increase the “aggravated breach “penalty, for employers that continually breach their employment law contracts, from £5,000 to a maximum limit of £20,000. These changes will start from 6th of April 2019.

6th April – Pension automatic enrolment contributions

From 6th April 2019, the minimum contributions employers and employees pay into your automatic enrolment workplace pension scheme will increase to 3% and 5% respectively.

It is the employer’s responsibility to make sure these changes are implemented, and they should consult with their staff before any changes are made to their pension scheme.

7th April – Increase in statutory pay rates, maternity, paternity and statutory shared parental pay

This year, with Brexit and the earlier budget, made the timing for the government to publish the statutory pay increases more uncertain, however, it is fantastic for companies that they have been released well before of April 2019.

National Living Wage will increase from £7.83 to £8.21 (for those aged 25 and over)

The National Minimum Wage rate for employees will increase as follows:

  • For employees aged 18-20 years, hourly pay will increase from £5.90 to £6.15;
  • For employees aged 21 – 24 years, hourly pay will increase from £7.38 to £7.70;
  • For those over compulsory school age but not yet 18, hourly pay will increase from £4.20 to £4.35.

The apprentice hourly rate will also increase from £3.70 to £3.90 as well as the daily accommodation offset will increase to £7.55.

Statutory rates for maternity pay, paternity pay, and shared parental pay have also been published by the government and will take effect from 7th of April 2019 and are as follows:

  • Weekly statutory maternity pay is rising from £145.18 to £148.68 (or 90% of the worker’s average weekly earnings if this figure is less than the statutory rate).
  • Weekly rates of statutory paternity pay and statutory shared parental pay will go up from £145.18 to £148.68 (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate).

Also increasing is the lower earnings limit £116 to £118 in April 2019

Tips

The government has taken on the task to introduce new legislation in order to make sure that any and all tips left by customers go to the employees in full. Although there isn’t a confirmed date for this change to take effect, employers should take into consideration formalising a tips policy now.

National Minimum Wage for sleep-ins

A court appeal in 2018 has ruled that care workers who sleep overnight are not entitled to the national minimum wage while they are asleep. An application to the Supreme Court has been made for permission to appeal this decision and a judgment is expected towards the end of 2019.

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