Autumn 2019 Newsletter

Grassroots Lake View

Welcome to our Autumn Newsletter

We trust that you have had a great Summer.  Within this newsletter we will outline upcoming employment law changes in 2020, along with a ‘heads-up’ as to an important type of insurance worth considering covering employment-related issues.

Employment Law Changes 2020

The Employment Rights (Employment Particulars and Paid Annual Leave (Amendment) Regulations 2018 are due to come into force on 6 April 2020. The changes will affect:

Good work plan: agency workers, annual leave, statement of terms – In the ‘Good work plan’, published in December 2018, the government made a commitment to abolish a legal loophole known as the ‘Swedish derogation’ in the rules governing the use of agency workers. This allowed agencies to opt out of equalising the pay of agency staff with the permanent workforce when they had been with the same employer for more than 12 weeks, provided they paid the agency workers between assignments. The opt-out will cease on 6 April 2020. Those employing Agency workers are likely to see an increase in rates as a result.

Holiday pay calculations for workers with no fixed hours are also set to change – The pay reference period for the calculation of statutory holiday pay is currently 12 weeks for those workers on zero hours contracts.  It is proposed that the pay reference will change to 52 weeks per year so that those operating with no fixed hours will not be disadvantaged.

Written statement of particulars – Currently employers should issue a written ‘statement of particulars’ to employees, within the first 8 weeks of employment, the changes propose that a written statement of particulars should be issued from day one; and should also include ‘workers’ as well as employees.

Tax on termination payments – The government’s plans to make any part of a termination payment over the sum of £30,000 subject to employer NICs is due to become law on 6 April 2020. This change was delayed from April 2018.

Next year’s Early May Bank Holiday will be moved back by four days for the whole of the UK to coincide with the 75th anniversary of VE Day – May Day is traditionally held on a Monday but will be put back to Friday 8 May 2020.  VE Day, or Victory in Europe Day, marks the day towards the end of World War Two when fighting against Nazi Germany came to an end in Europe.

Parental bereavement provision – In October 2017, the government confirmed its backing for a private members’ bill, the Parental Bereavement (Leave and Pay) Bill. The Bill, which became the Parental Bereavement (Leave and Pay) Act on 13 September 2018, will entitle employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, to two weeks’ unpaid leave, as a right from day one of their employment. The leave will be paid at the statutory rate if the employee has 26 weeks’ service. The government is aiming for the new law to be in force in 2020. Employed parents are already entitled to take a reasonable amount of unpaid time off to deal with an emergency involving a dependant, including dealing with a dependant’s death, as a day one right.

IR35 (Intermediaries Legislation) Off Payroll Working – If you hire contractors to work for your company the wider implementation of IR35 legislation which is due to extend to the private sector from April 2020 may affect your business. In 2017, changes to existing IR35 legislation came into effect across the Public Sector which required Employment Status to be confirmed for tax purposes.

Personal Service Contractors, that is contractors hired via their own limited company, classed as self-employed and responsible for the payment of Tax and NI contributions are now required to submit to an ‘Employment Status Test’.

Contractors who were found to have no control over the location, duration, working hours, how the work was carried out and if a substitute could be sent in to complete the work on their behalf were classed as ‘Employed’ for tax purposes and therefore had to be paid via PAYE.

When changes come into effect in April 2020 it will be the responsibility of the engaging organisations to confirm the individual’s employment status prior to the contract commencing. Failure to do so can result in the company being held entirely responsible for any Tax and NI payments. The Employment Status Test can be accessed here:

https://www.gov.uk/guidance/check-employment-status-for-tax

The importance of having Directors & Officers (D&O) Insurance including Employment Practices Liability (EPL) Insurance – Employee legal actions are, unfortunately, rising rapidly and many companies have been on the receiving end of employment tribunals.  These are often complex involving multiple heads of action and are costly and complex to defend.  A Directors and Officers policy offers peace of mind from costly legal bills and will, in many cases, pay awards and claimants’ costs if awarded against you – that’s why we always ask if you have it in place when you begin working with us!

In particular, the Employment Practices Liability (EPL) clauses are very worthwhile considering. Please contact your Company’s insurance broker to see if you are covered or give us a call for more information or to be signposted to our highly knowledgeable insurance broker.

Phone number – If you are using 0845 9002779 to contact us, please be aware that this number will be obsolete from the new year and you should use 01772 600228 with immediate effect and be sure to delete the 0845 number before the end of the year.

For a more in-depth discussion on any of these topics, please contact us on either 01772 600228 or office@grassrootshr.co.uk.

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