The following changes are due to come into force in April 2020.
As it's still a long way off, detail is still sketchy, but this is what is on the horizon so far:-
Increase in holiday reference period from 12 weeks to 52 weeks:
the proposal is to increase the reference period used for determining a week's pay when calculating holiday pay for workers with irregular hours from 12 weeks to 52 weeks, which is seen to be a fairer time period to use
Extension of the right to a written statement of employment particulars to all workers:
Written statement will be a day one right for all workers. Employers will also have to provide additional information as mandatory content for a written statement
Parental bereavement leave rights take effect:
Provides for at least two weeks' leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees with 26 weeks' continuous service will be entitled to paid leave at the statutory rate and other employees will be entitled to unpaid leave
In April 2020
, the IR35 Regulations will begin to take effect to medium and large companies in the private sector that contract with personal service companies for the provision of services. This has the effect that these companies will have to account for tax and national insurance through PAYE in the same way as the public sector has been required to do since April 2017. (See November Newsletter for more Information)
The Living Wage Foundation has outlined that rates have increased to £10.75 for workers based in London, and £9.30 for those in the rest of the UK.
Reviewed each year by the Living Wage Foundation, the voluntary Living Wage is based on the ‘real’ cost of living as is set by the Foundation, which is calculated by basing averages on a ‘basket of household goods and services’. Its purpose is to provide workers with higher minimum wage rates than what is currently facilitated by the government. As a voluntary scheme, organisations can choose to opt-in to paying the higher minimum wages but, once they have done so, must ensure worker salaries to fall into line with the rates as set by the Foundation.
These increases are as follows:
• London Living Wage – increases by 1.8 per cent from £10.55 to £10.75 per hour
• UK Living Wage – increases by 3.3 per cent from £9.00 to £9.30 per hour.
Going forward, all organisations who provide the ‘real’ Living Wage will now have until 1 May 2020 to implement these changes, although they are encouraged to do so as soon as possible. As of 2019, over 6,000 UK businesses have signed up to the scheme, which has resulted in a pay rise for in excess of 180,000 employees. This includes around one third of the FTSE 100, alongside recognisable, high-profile operators such as IKEA, ITV and Everton.
Although voluntary, providing the ‘real’ Living Wage can be an effective measure of both attracting employees to an organisation and retaining them. With Brexit uncertainty continuing to dominate the headlines, organisations may wish to consider introducing new measures that can assist them in finding the individuals they need to in order to ensure continued company development and progression.
The ‘real’ Living Wage is not to be confused with the National Living Wage (NLW). The NLW was introduced by the government in April 2016 and is the statutory minimum hourly rate that should be paid to all workers aged 25 and over. As the previously expected autumn budget has now been delayed due to the upcoming General Election, we still are unaware of what the new statutory rates will be come April 2020.
That said, organisations should make sure they are up to date with these developments. Those who do not pass on the increases to statutory rates will be operating in breach of the law. This could result in penalty fines of up to 200 per cent of the underpayment, which can be up to a maximum of £20,000 per worker.