There are two key months in the employment law calendar – April and October. They key changes this month, and what you need to do to ensure you comply with the new provisions is outlined below.

What has changed

1.With effect from 1 April 2019, the National Minimum Wage (NMW) for workers aged 25 and over increases to £8.21 per hour. Other NMW rates also increase, with hourly rates rising to £7.70 for workers aged 21 to 24, to £6.15 for workers aged 18 to 20 and to £4.35 for workers under 18 who are no longer of compulsory school age. The NMW rate for apprentices will increase to £3.90 per hour.

1.With effect from 1 April 2019, the National Minimum Wage (NMW) for workers aged 25 and over increases to £8.21 per hour. Other NMW rates also increase, with hourly rates rising to £7.70 for workers aged 21 to 24, to £6.15 for workers aged 18 to 20 and to £4.35 for workers under 18 who are no longer of compulsory school age. The NMW rate for apprentices will increase to £3.90 per hour.

Employers should increase hourly rates of pay to comply with the changes above, and should write to employees to confirm the change to their pay rate.

Employers must keep records of all payments to employees and workers so they can demonstrate they have complied with NMW rules. This can include a copy of the letters issued above, along with records of actual payments made to employees for hours worked.

2. The weekly rate of statutory maternity, paternity, adoption and shared parental pay increases to £148.68 for pay weeks commencing on or after 7 April 2019.

The weekly rate of statutory sick pay increases to £94.25 from 6 April 2019.

Employers must ensure that employees receive these statutory minimum rates, and update their policies to reflect these changes.

3. New limits on statutory redundancy pay comes into force on 6 April 2019. Employers that dismiss employees by reason of redundancy must pay employees with 2 years service an amount based on their weekly pay, age and length of service. The weekly pay is subject to a cap, and this cap has increased to £525 with effect from this date.

Employers must ensure they update their redundancy policies and procedures to reflect this change and that the new cap is applied to any redundancies made after 6 April 2019. This applies where the redundancy consultation process started prior to this date.

4. There are two important changes to the Employment Rights Act 1996 which come into force on 6th April. These affect pay slip information:

  • Employers must include the total number of hours worked where pay varies according to hours worked.
  • Payslips must be given to all “workers” not just employees.

What is a worker?

A worker is any individual who works for an employer, whether under a contract of employment, or any other contract or arrangements where the individual (worker) undertakes to personally complete any work or provide a service. The following are likely to be workers, but not employees:

  • Most agency workers
  • Casual workers
  • Some freelancers

Employers should update their pay processes to ensure their payslips comply with the new requirements.

5. From 6 April 2019, the minimum level of employer contribution into a pension auto-enrolment scheme increases from 2% to 3% of qualifying earnings. There is a corresponding increase in employee contributions from 3% to 5%. The total minimum contribution has therefore increased from 5% to 8% of qualifying earnings.

What are qualifying earnings?

Qualifying earnings is the name given to a band of earnings that can be used to calculate contributions for auto-enrolment. For the 2019/2020 tax year this is between £6,136 and £50,000. The figures are reviewed annually by the government.

Employers should ensure that their, and their employees’ contributions to pension schemes are increased in line with the new rates.

6. The personal tax allowance is increasing to £12,500, and the higher rate threshold to £50,000 for the 2019/2020 tax year, which commences on 6 April 2019.

Employees will be issued with tax codes for the 2019/2020 tax year, and employers must ensure that these are applied.

What changes are planned for the future?

The Government has proposed legislation for 2019, following the Taylor Review of Modern Working Practices. The proposed new legislation will:

  • Prevent agency workers from being paid a lower rate than permanent employees doing the same job.
  • Extend the right to a day one written statement of rights of workers, going further to include detail on rights such as eligibility for sick leave and pay, and details of other types of paid leave such as maternity and paternity leave.
  • Quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000.
  • Extend the holiday pay reference period from 12 to 52 weeks, ensuring those in seasonal or atypical roles have holiday pay calculated over a longer period.
  • Lower the threshold required to request to set up Information and Consultation arrangements from 10% to 2%.
  • The government also plans to legislate to improve the clarity of employment status tests to reflect the reality of modern working relationships. This aims to provide greater clarity around whether an individual is self-employed, a worker or an employee – not always as simple as it sounds to establish!

The 2018’s Court of Appeal decision on Mencap v Tomlinson Blake and Shannon v Rampersad set a precedent that individuals working on sleep-in shifts, such as nurses and care workers, would not be entitled to the NMW for time spent asleep in cases where they were available for work but not actually working. A request to appeal this decision was lodged with the Supreme Court by UNISON and a decision is expected in 2019 as to whether the appeal will be allowed to proceed. Any ruling will be significant in determining whether employers will be required to pay NMW rates for employees working sleep-in shifts.

The government has brought forward a review into the use of non-disclosure agreements, and a response is expected in 2019. The government aims to provide more detailed advice on when and how these types of agreement can be used in the workplace.

Finally, employers should continue to monitor developments as the Brexit process continues. At the time of writing, the official leave date is 12 April, however, the situation is changing rapidly, and it is important that employers keep up to date with the implications of any deal agreed or a no-deal Brexit. This could particularly affect employees who are EEA nationals. It is advisable that employers encourage any employee who is an EEA national to apply for settled or pre-settled status so their right to remain living and working in the UK is not affected.

The responsibilities on employers are increasing all the time, and the risks of getting things wrong are also growing. If you would like further information or advice, please contact us at enquiries@opthr.co.uk