What employment law changes can businesses expect in 2020?

April 2020 is set to be a busy time, with multiple employment law changes coming into force that businesses need to be aware of. As with any employment law matter, firms need to think about how these changes affect them now and plan accordingly, rather than simply waiting for their introduction before taking appropriate steps.

Written statement of key terms

All workers, including employees starting work on or after 6 April 2020, will be entitled to a written statement of key terms on or before the date they start. This will need to include additional details such as any probationary period and training entitlements.

Key facts for agency workers

All employers will be required to provide agency workers with a key information document containing prescribed information including:

  • their type of contract;
  • the minimum expected rate of pay;
  • how they will be paid and by whom (for example, an intermediary or umbrella company);
  • any deductions or fees that will be taken;
  • any non-monetary benefits to which they will be entitled; and
  • any entitlement to annual leave and payment in respect of such leave, and an illustrative example of what this might mean for take-home pay.

Holiday reference period

The holiday pay reference period for determining a week’s pay is changing from 12 to 52 weeks. This will ensure those who do not work a regular pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower. 

The 52-week reference period will apply to all calculations of statutory holiday pay under the Working Time Regulations 1998, in which the 12-week reference period would otherwise have been used. In other words, this will affect workers with no normal working hours, and workers with normal working hours whose pay varies with the amount of work done or the times or days on which it is done. Employers need to make sure they are calculating holiday pay in the correct way.

Information and consultation thresholds

The threshold required for a valid employee request to negotiate an agreement on informing and consulting its employees will be lowered from 10 per cent to 2 per cent of employees, subject to the existing minimum of 15 employees. 

IR35 and off-payroll rules

Tax legislation IR35 will be extended to the private sector from April 2020. The responsibility for determining employment status for tax purposes will shift to the employer. Businesses should ensure they have an action plan to review their current arrangements with off-payroll workers, their internal systems and their policies should the changes apply to them. 

National insurance contributions on termination payments

Class 1A employer national insurance contributions will be payable on termination payments of more than £30,000.

The Parental Bereavement (Leave and Pay) Act 2018

Legislation is expected entitling all employed parents or carers to a day-one right to two weeks leave if they lose a child under the age of 18 or suffer a stillbirth after 24 weeks of pregnancy. If the employee has more than 26 weeks of continuous service, they’re entitled to the statutory rate for this two-week period – otherwise, the leave will be unpaid.