April Update

Moving away from further Coronavirus updates, here are changes that have been brought into force with effect from this month.

1 April 2020 

Increase to the National Minimum Wage (NMW) and National Living Wage (NLW)

Apprentice – increases from £3.90 to £4.15

Under 18’s – increases from £4.35 to £4.55

18-20 year olds – increases from £6.15 to £6.45

21-24 year olds – increases from £7.70 to £8.20

25 and over – increases from £8.21 to £8.72

5 April 2020

Increase in Statutory Family-Related Pay
The weekly rate of statutory maternity, paternity, adoption and shared parental leave pay has increased from £148.68 to £151.20.

6 April 2020

Increase in Statutory Sick Pay (SSP)
From 6 April 2020, the weekly rate of statutory sick pay has increased from £92.05 to £95.85.

Unfair Dismissal Compensation
The maximum compensation award for unfair dismissal has increased from £86.444 to £88,519 for dismissals that take place on or after 6 April 2020.

Changes to Written Statements of Terms and Conditions
The requirement to provide a written statement of terms and conditions extends to workers, not just employees. This includes casual and zero hours workers.

The statement of terms and conditions must now be given to the worker on or before their first day.

The information which needs to be included within the statement of terms and conditions of employment has also been broadened. In addition to the current information that must be provided for all new starters, on or after 6 April 2020 the employment terms and conditions should also include:

• how long a job is likely to last, or the end date of a fixed-term contract;
• the duration and conditions of any probationary period;
• how much notice the employer and worker are required to give to terminate the agreement;
• details of eligibility for sick leave and pay;
• details of other types of paid leave;
• all remuneration (not just pay) including benefits that the employer or worker is entitled to;
• training entitlement provided by the employer, any part of that training entitlement which the employer requires the worker to complete and for which the employer will not bear the cost; and
• normal working hours, also the days of the week the worker is required to work, and whether or not such hours or days may be variable, and if they are, how they vary or how that variation is to be determined.

Parental Bereavement Leave
The implementation of the Parental Bereavement Leave Regulations 2020 came into force with effect from 6 April 2020.

Parents who have tragically lost a child or suffered a still birth from 24 weeks of pregnancy are entitled to up to two weeks parental bereavement leave to be taken at any time within a period of 56 weeks from the date of the child’s death. The right to this statutory leave applies from ‘day one’ of employment. Parents will also be entitled to be paid during the two weeks parental bereavement leave where they have accrued 26 weeks of service.

If you would like further information or assistance updating your Staff Handbook to encompass this policy then please do not hesitate to contact us.

Protecting Agency Workers
After 12 weeks of service, an agency worker is entitled to receive the same level of pay as a permanent worker. Previously agency workers were able to opt out of this right and instead elect to receive a guaranteed level of pay between their temporary assignments (often referred to as “the Swedish derogation”).

This opt-out has been removed from 6 April 2020 as agency workers often found themselves financially worse off, compared to employees, when taking the Swedish derogation route.

Key Terms for Agency Workers
Employment businesses will be required to provide every agency worker with a document known as a “key facts page”. This will need to include certain details, such as the type of contract they are employed under, the minimum rate of pay they will receive and details of any fees that might be taken. This will help agency workers better understand their basic terms, which can be especially difficult where intermediary umbrella companies are involved.

By no later than 30 April 2020, temporary work agencies must provide agency workers whose existing contracts contain a Swedish derogation provision with a written statement advising that, with effect from 6 April 2020, those provisions no longer apply.

Holiday Pay
The reference period used to calculate holiday pay will be extended from 12 weeks to 52 weeks, which is an important development for those who work variable hours. Before 6 April 2020 a worker may have had different rates of pay during holidays taken, depending on how many hours they worked in the three months previous.

In response to recent case law, there will also be a campaign to ensure that individuals better understand their rights and a new holiday entitlement calculator will be launched.

Employer National Insurance Contributions on Termination Payments above £30,000
Termination payments are payments which are made in connection with the termination of employment. From April 2020, any non-contractual termination payments are subject to 13.8% Class 1A to the extent that they exceed the existing £30,000 exemption which also applies for income tax.

Employers will need to bear in mind the additional costs that this charge will add to termination packages.

IR35
Due to the current events surrounding Covid-19, the proposed changes surrounding IR35 have now been postponed to April 2021.

If you have any queries regarding any of the changes outlined in this article, be it clarification on holiday pay, checking to make sure your contracts of employment meet the new legal criteria or the preparation of policies for Parental Bereavement Leave and Pay Policy for your Staff Handbook, then please contact Sarah Collier scollier@kbl.co.uk who would be happy to advise and assist.  Correct as at 14th April 2020.