Macleod & MacCallum – Employment Law & HR Support (Highlands)

April 2019 Employment Law Changes

Spring Changes to Figures

Every new tax year (6 April) generally sees changes to important employment law related figures and this Spring is no exception.

The “cap” on a week’s pay – used for calculating statutory redundancy payments and the “basic award” for unfair dismissal (for example) – has increased to £525. This means the maximum basic award, or statutory redundancy payment, is now £15,750. However, it should be noted that a proper assessment of such entitlement/award may only be the start of the advice required, in any given redundancy (or other possible dismissal) situation.

The standard rate for statutory maternity/paternity pay (and also adoption and shared parental pay) has also increased to £148.68 per week and, similarly, the statutory sick pay rate has increased to £94.25 per week.

The National Minimum Wage (now The National Living Wage) rates also changed, from 1 April. The figure, for those aged 25 years and older, is now £8.21 per hour. The full list of increases is as follows:

-Age 25+, now £8.21 per hour
-Ages 21 to 24 rate, now £7.70 per hour
-Ages 18 to 20 rate, now £6.15 per hour
-Ages 16-17 rate, now £4.35 per hour
-Apprentice Rate, now £3.90 per hour (applies to Apprentices under 19, or 19 and over but in their first year of apprenticeship)

Payslips

Two important changes have also taken place in respect of payslips. Payslips, for all workers, must now state the number of hours being paid for, where wages vary according to time worked. All workers (including casual/zero-hours staff), as well as employees, also now have the right to a written payslip/statement and can enforce that right before a Tribunal – should an employer not comply. All businesses not already aware of this are best to take advice urgently, and also contact any payroll advisors/partners.

The Good Work Plan

This April has also seen the start of the changes brought about through The Good Work Plan. From this month, the penalties for “aggravated” breaches of employment law increase from £5,000 to £20,000. Whilst the majority of The Good Work Plan changes, will not come into effect until next April, it is worth thinking ahead.

The most significant likely change is that the right to a written statement of employment terms (or contract) will become a “day 1” right, rather than applying 2 months into employment. Even more significantly, however, this right will be extended beyond employees and shall apply to all workers – who commence employment from 6 April 2020.

Other likely changes include the right of casual/zero-hours staff to request a more “stable and predictable” contract, after 6 months of service. However, this is only an entitlement to ask, so may not ultimately assist those caught on long-term zero-hours contracts.

One other interesting likely change is the extension of the reference period, in terms of calculating holiday pay, to 52 weeks (from 12 weeks). Recent years have seen high profile cases surrounding variable pay associated with (for example) overtime hours/commission payments etc and consequent increased holiday pay entitlements. This has then led to some employers being reluctant to allow holidays, following a spike in overtime hours/commission payments, and may prove of significance in the Highlands “seasonal” economy.

Summary

Whilst the vast majority of changes, arising from The Good Work Plan, will not take place till at least April 2020, it is worth planning ahead. Those not already issuing contracts, as a matter of course, are best advised to take advice and begin doing so. This should hopefully limit the work required, when such contracts become a legal requirement. If the payslip changes, already in effect, impacts on your business then you should take advice straight away.

Mac & Mac Employment Team, Euan Smith and Graham Laughton, act for a number of local businesses and can be contacted on 01463239393 or employment@macandmac.co.uk.

Graham Laughton

Graham Laughton
Email Graham
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April 26, 2019