Significant Changes for Employers from 6 April 2020

Ed Hussey - Menzies Accountant

Ed Hussey – People Solutions Director

Changes being implemented on 6th April 2020 will have practical implications for all employers. This is the time of year when new employment legislation comes into effect, particularly the annual increases to statutory payments. But with the extension of IR35 to the Private Sector, and implementation of (some of) the Good Work Plan, 2020 is going to be a bumper year and employers must take note.

This is our summary of the key items and we recommend you check for further details where this affects you.

‘Good Work Plan’

The Big One – Written Particulars (or Employment Contract)

branded icon of notebook from menzies

From 6th April 2020, ALL WORKERS AND EMPLOYEES must receive a written statement of particulars/terms and conditions ON DAY ONE of employment, rather than within eight weeks as it was before.

There is also a change in what information must be included in this written statement.

The new, mandatory information that must be laid out in the employment contract from 6th April 2020 is as follows:

  • the terms and conditions relating to work will extend to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
  • terms relating to other forms of paid leave such as family-friendly leave
  • details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
  • terms relating to probationary periods including those in relation to length and conditions
  • details of training provision and requirements.

Some of these details may have been previously covered in Company Policies or Handbooks, but this change will mean that contracts need a thorough review to ensure that they are compliant.

There are also particulars that may currently be included in a supplementary statement but which will have to be given in the principal statement:

  • The notice periods for termination by either side.
    • Terms relating to absence due to incapacity and sick pay.
    • Terms as to length of temporary or fixed-term work.
    • Terms related to work outside the UK for a period of more than one month.

This amendment to the Employment Rights Act states that a ‘statement of particulars’ can no longer be delivered in instalments, but must be provided to all employees from day one of starting work and as one single document.

Furthermore, existing employees can, on or after 6th April 2020, request an updated statement of particulars from their employer. This must be delivered to the employee no later than ONE MONTH after the request has been made.

Calculating Average Weekly Pay for holiday pay purposes

abacus graphic

The reference period used in determining an average week’s pay has been extended from 12 weeks to 52 weeks (or the length of employment if less) from 6th April 2020.  This relates to calculating the holiday pay for irregular/seasonal workers.   You will need to look back and include only the last 52 weeks that a worker worked and received pay.  This means you probably need to go back more than 52 weeks and the government has applied a limit of 104 weeks!

branded menzies icon of female

Agency Workers

From 6th April 2020, agencies can no longer opt out of equalising the pay of agency staff with their permanent workforce when they had been with the same employer for more than 12 weeks.

NEW Parental Bereavement Leave and Pay

  • The Parental Bereavement (Leave and Pay) Act 2018 provides for at least two weeks’ leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy.
  • Employees with 26 weeks’ continuous service will be entitled to two weeks of paid leave at the statutory rate of £151.20 or 90% of the employee’s average weekly earnings, whichever is lower, and other employees will be entitled to unpaid leave.
  • This does not affect an employee’s ongoing entitlement to time off for dependants (a reasonable amount of unpaid time off for emergencies relating to a dependant)

The Other Big One – IR35 Extends to Private Sector

This has been in force in the public sector since 2017, and now private sector employers have the responsibility of determining whether IR35 applies to contractors.

This applies to businesses classified by the Companies Act as medium or large in size.  This usually means exceeding two of the following three tests:

  • Turnover in excess of £10.2M
  • Assets in excess of £5.1M
  • More than 50 employees

For connected companies you need to look at the cumulative totals for all the businesses to see whether the limits have been exceeded.  An LLP or other incorporated business is within scope if the turnover is in excess of £10.2M without consideration of the other tests.

See our articles on IR35

Also look out for:

Annual increases to statutory pay amounts occur April every year which usually impact:

National Minimum Wage (NMW)

Maternity, paternity, adoption and shared parental pay

Statutory Sick Pay (SSP)

Statutory Redundancy Pay

Posted in Blog, Healthcare, Hospitality & leisure, Manufacturing, Not-for-profit, Property & construction, Retail, Technology, Transport & logistics, Recruitment, Legal Services, Financial Services