Employment Law changes in 2020
What every HR department needs to know.
Holiday pay and flexible working are among major changes to employment law being introduced next year.
Matthew Taylor’s working practices review of 2017 found that existing legislation could not keep up with today’s flexible working patterns and improved technology. These modern practices mean that employees do not always have to be in a particular place at a particular time in order to fulfil their roles and the Government’s Good Work Plan aims to change the traditional outlook on working practices and relationships.
The Taylor report identified changes that will benefit both the employer and the employee. From April 6, 2020, the following changes will be introduced:
Staff who work irregular hours currently have their holiday pay calculated by averaging the number of hours they worked during the previous 12 weeks. This affects seasonal workers who might be working less – if at all - during quieter periods. The new payment reference period will be the average number of hours worked over the past 52 weeks, or the number of weeks they have worked if it is less than a year.
This will also benefit employers whose cash flow will not be affected by seasonal extremes.
Employers must provide written terms of employment for every employee who is in post for at least a month. Current legislation says that this must be provided within two months of the first day of employment. From next year, this must be provided on day one of employment. It has also been extended to workers as well as employees and must include the days of the week the employee is expected to work, whether days or hours are flexible, all benefits provided by the employer, details of any probationary period and any entitlement to training.
After 12 weeks of employment, agency staff are currently entitled to the same rate of pay as permanent staff – unless they receive a salary from their agency between assignments. This distinction will be removed so that all agency workers are treated the same from April 6, 2020.
Taxing termination payments
Any part of a termination payment over £30,000 will be subject to employer NICs, making all payments in lieu of notices (PILONs) taxable earnings.
Reducing tax avoidance
The IR35 tax rules are being extended to the private sector from April 2020 to reduce tax avoidance for off-payroll contractors and will also apply to private sector businesses with an annual turnover of over £10.2 million or 50 or more employees.
More changes coming under Good Work Plan
The government has also launched consultations into;
- Reforming existing entitlements to parental leave and pay.
- Proposals for leave and pay entitlement for parents of babies that require neonatal care after birth.
- Considering whether employers should be obliged to consider if a job can be done using flexible working and be made to advertise it as such.
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