Employment law and HMRC regulations rarely stand still with constant updates to keep up with the ever-changing world of work. And this year there are 10 key employment law changes on your need-to-know list.
The good news is there is some simplification and increases to statutory rates of pay. The less good news is that some of the changes will add to the burden faced by employers still recovering from covid, inflation and interest rate hits.
Read on to find out how the changes will impact you and your company.
1. NATIONAL MINIMUM WAGE
From 1st April 2024, the minimum wage rates will increase as follows:
- Workers aged 21 and over: Increase to £11.44
- Workers aged 18 to 20: Increase from £7.49 to £8.60
- Workers aged 16 to 17: Increase from £5.28 to £6.40
- Apprentices: Increase from £5.28 to £6.40
Employers must ensure that they pay the correct minimum wage to their employees. Failure to do so can result in claims from staff, paying arrears, significant penalties, and reputational damage.
2. STATUTORY MATERNITY PAY
The rate of Statutory Maternity Pay (and other family related statutory payments) increases to £184.03 per week from 1st April 2024 (also under the Social Security Benefits Up-rating Order 2024).
Importantly for those using Umbrella PAYE services, this increases the effective rate for payments to £14.75 per hour (based on a 50-hour week).
3. IR35
Changes to the IR35 regime (also known as off-payroll working), come into effect from 1st April 2024, and are likely to provide some welcome clarity for organisations that work with individuals via an intermediary company.
In simple terms, the recipient of the individual’s services has to make a status determination statement, explaining whether the individual is employed or self-employed for tax purposes. This is not always an easy decision to make, even if you use HMRC’s ‘Check Employment Status for Tax’ (CEST) tool.
Under the new measures, if a status determination is deemed to be incorrect, the burden of liability is to be shared between employer and worker/their intermediary.
In Practice this will mean even more reliance on getting the correct status for a worker and avoid liabilities for both the employer/worker and intermediary.
4. HOLIDAY PAY & ENTITLEMENT REFORMS
From 1st January 2024, the government has introduced reforms to simplify holiday entitlement and holiday pay calculations in the Working Time Regulations.
This change is hugely welcomed (anything which simplifies payroll generally is!) and is a great example where HMRC have engaged and listened to employers, payroll providers and workers.
These changes include:
- Defining irregular hours workers and part-year workers in relation to the introduction of the holiday entitlement accrual method and rolled-up holiday pay.
- Introducing a method to calculate statutory holiday entitlement for irregular hours and part-year workers.
- Introducing a method to work out how much leave an irregular hour or part-year worker has accrued when they take maternity or family-related leave or are off sick.
- Removing the Working Time (Coronavirus) (Amendment) Regulations 2020 which affect the accrual of COVID-19 carryover of leave.
- Defining what is considered ‘normal remuneration’ in relation to the 4 weeks of statutory annual leave.
Employers should review their flexible working policies to ensure that they reflect the new requirements, train managers on how to handle flexible working requests in light of the new requirements, and plan communications to staff to reflect the changes.
5. SICK PAY
The annual increases to statutory rates for statutory sick pay will take effect on April 2024, increasing Statutory Sick Pay to £116.75
6. EMPLOYMENT OF ILLEGAL IMMIGRANTS
On 22nd January (under the Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023), the maximum civil penalty for the illegal employment of an adult who is subject to immigration control will triple, from £20,000 to £60,000 for each offence.
We expect that the revised Code of Practice on the civil penalty schemes for employers (preventing illegal working - currently in draft) will be applied to all right to work checks from this date. This includes where a follow-up check is required to maintain a statutory excuse, even if the initial check was previously undertaken using the version of the Code in place at that time. In practice, employers should make sure the right to work checks are robust and use a qualified and documented mechanism.
7. CARER'S LEAVE ACT
This act will provide eligible employees with the right to take up to 10 days of unpaid leave per year to care for a family member or someone who depends on them for care. Employers should ensure that they have a policy in place that outlines the eligibility criteria and the process for requesting carer’s leave.
8. NEONATAL CARE (LEAVE AND PAY) ACT
This act will provide eligible employees with the right to take up to 12 weeks of leave and receive statutory pay to care for their newborn child who is in neonatal care. Employers should ensure that they have a policy in place that outlines the eligibility criteria and the process for requesting neonatal care leave.
9. PROTECTION FROM REDUNDANCY (PREGNANCY AND FAMILY LEAVE) ACT
This act will provide additional protection to pregnant employees and those on family leave from redundancy. Employers will be required to offer suitable alternative employment to such employees in the event of redundancy.
Employers should ensure that they have a policy in place that outlines the eligibility criteria and the process for offering suitable alternative employment.
10. EQUALITY ACT AND RETAINED EU LAW
The Equality Act 2010 (Amendment) Regulations 2023 makes various changes to the Equality Act 2010 to reproduce certain interpretive effects of retained EU law which would otherwise cease to apply in the UK after the end of 2023.
These include amending the definition of disability to take into account a person’s ability to participate in working life on an equal basis with others and providing an express right to claim indirect discrimination by association.
WHAT SHOULD EMPLOYERS DO?
Employers must be aware of these developments and take appropriate actions to guarantee compliance.
Key steps include examining current rules and procedures, revising employee handbooks, and providing managers and staff with training.
In addition, any payroll systems you have need to updated on time to ensure that your IT keeps up with the complexity and pace of change.
WHAT WILL THE NEW LEGISLATION MEAN?
As ever, employment law and HMRC regulations rarely stand still with constant updates to keep up with the ever-changing world of work. The upcoming changes represent a mixed bag of news for employers and workers.
The positive changes bring increases to worker pay and protections, along with much needed simplification of various regulations.
However, these changes also add to the burden felt by employers, many of whom are struggling following covid, inflation and interest rates. We will be watching the situation closely and working with clients to help them navigate the changes smoothly and at the lowest possible cost.
Unsure whether you're compliant? Give the BoostPay team a call and we'll be happy to help.
