In the last 10 years, the UK has seen the first December General Election since the 1920s, watched countless hours of news coverage on the topic of Brexit and witnessed Larry the cat assume office as Chief Mouser to the Cabinet Office. Yet the dawn of a new decade heralds some important changes and new additions to UK employment law that come into force in April 2020 including amendments to the Working Time Regulations 1998 and Employment Rights Act 1996.
Read on to find out what the law currently states, what changes will come into effect on Monday 6th April 2020 and what these changes will ultimately mean for UK businesses.
(Amendment to the Employment Rights Act 1996)
At present, UK employment law states that an employer must give employees a written statement of employment particulars within the first two months of their employment (providing their employment lasts more than a month). This document, often contained within a contract of employment, outlines the basic terms and conditions of employment.
These can be delivered in instalments, as long as all particulars are delivered within two months of the start of employment.
At minimum, a principal statement of particulars must include:
A further written statement must also contain information, where applicable, about:
Amendments to UK employment law that come into force in April state that employees have “the right to a written statement of particulars of employment when an individual begins employment (a day one right)” (Legislation.gov.uk, 2018).
Employers will also have to include further information on the statement of particulars when an employee joins a business.
Furthermore, existing employees can, on or after 6th April 2020, request an updated statement of particulars from their employer. This must be delivered to the employee no later than one month after the request has been made.
This amendment to the Employment Rights Act states that a statement of particulars can no longer be delivered in instalments, but must be provided to all employees from day one of starting work and as one single document.
In short, you need to be better prepared when welcoming new employees to your business. Review your existing contracts and make the necessary changes to accommodate these changes. Make sure your business’ contract of employment covers off all of the required information for a statement of particulars and update it as necessary for any new employees.
This should ensure clearer lines of communication between HR in preparing a contract and/or statement of particulars and the manager conducting interviews and negotiations with candidates. The job being offered should be documented in its entirety and all of the necessary information required for a statement of particulars should be clear and agreed between HR, the hiring manager/head of department and the new starter ahead of their first day.
While the changes to the Employment Rights Act 1996 don’t state that you have to provide all existing employees with an updated statement of particulars – be prepared for an existing employee to request one on or after 6th April 2020 (and at any time up to three months after the end of their employment).
(Amendments to regulation 16 of the Working Time Regulations 1998)
As it stands, all employees are entitled to paid annual leave and they must be paid the same amount when on holiday as they would receive when they’re at work – regardless of their working pattern.
Holiday pay can be calculated based on the days or hours worked per week, annual hours, compressed hours or shifts.
If an employee’s working hours don’t vary (i.e. they work 9 am – 5:30 pm, 5 days per week), their holiday pay should be calculated using their usual pay rate.
For example, Jack works from 9 am to 5:30 pm every day, Monday to Friday. If he takes seven days of annual leave in January, he will be paid the same amount as if he has worked a typical week.
However (and this is where it gets a little complicated), if an employee doesn’t have fixed or regular hours or their pay isn’t always the same, their holiday pay is calculated based on the average number of hours worked, at their average pay in the previous 12 weeks. 12 weeks being the current holiday reference period under the current iteration of the Working Time Regulations.
For example, Jill has worked an average of 23 hours per week over the last 12 weeks and has been paid an average of £10.50 per hour for her work. As such, she would be entitled to £241.50 per week as holiday pay (£10.50 per hour x 23 hours).
The amendments being made to the Working Time Regulations 1998 that come into force in April will make changes to the holiday reference period which is currently 12 weeks.
The holiday reference period used to calculate holiday pay for variable workers is being increased to 52 weeks (for employees that have been in your employment for more than 52 weeks).
Thus, to calculate the holiday pay for an employee on variable hours or pay, you will need to work out the average hours worked and average pay from the previous 52 weeks.
If you have employees on variable hours or pay that have been in your employment for less than 52 weeks, the holiday reference period will be the number of weeks for which they have been employed. Again, you would need to calculate the average number of hours worked and that average pay for the period of time they have been employed.
As with current employment law, any weeks an employee hasn’t worked or received pay for should be excluded from your calculations.
These changes to the methods in which holiday pay is calculated should greatly benefit employees on variable hours. The change in reference period should help even out any peaks and troughs in pay for employees, particularly those in seasonal roles.
What it does mean for your business, however, is that you must ensure that your records of the hours worked and pay received by these employees are correct as any incorrect records will directly impact an employee’s pay. Online clocking in systems or timesheets can be helpful to track the exact hours worked by each employee, where details of hours worked and any variable pay entitlement can be logged. This information is then securely stored online and is easily accessible whenever employees make annual leave requests.
While there is no current law relating to parental bereavement in particular, under current UK employment law, most employees have a statutory right to a ‘reasonable’ period of unpaid time off to deal with unforeseen matters or emergency situations that involve a dependent. This includes time off to arrange or attend a funeral. A dependent can be a spouse or civil partner, child, parent or someone who depends on you for care or help during an emergency.
Also known as compassionate or bereavement leave, some employers may have policies in place that offer a defined number of days that will be paid during such difficult times, but this is entirely at the employer’s discretion.
Monday 6th April 2020 will see an addition to the Employment Rights Act 1996 called Parental Bereavement Leave come into force.
This additional legislation entitles parents up to two weeks’ paid leave if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy as a day one right.
Bereaved parents must take their leave before the end of a period of at least 56 days beginning with the date of the child’s death. Parents can choose to take this as one block of two weeks’ paid leave or two blocks of one week, as long as the leave is taken with 56 days of the loss of their child.
In the case of losing multiple children, parents will be entitled to paid leave for each child.
While changes to the law surrounding parental bereavement are imminent, making sure you have the right support in place in your business should not be an afterthought. Both managers and colleagues should be able to support an employee going through a bereavement of any kind.
While it is not mandatory to have a compassionate or bereavement leave policy nor do you have to pay employees during a period of time off for any situation or emergency involving a dependent; most employers do pay for a certain number of days off for dependents each year.
However, the Parental Bereavement Leave Act will make paid leave for parents that experience the loss of a child or a stillbirth a legal right.
While the new legislation will provide a solid foundation for businesses in devising a policy that supports bereaved parents, it is still the bare, legal minimum that must be provided. Be sure that your bereavement policies support employee wellbeing. Remember, it’s not a ‘one size fits all process’, we all deal with grief differently and you need to make sure your employees are reassured and supported in both the immediate aftermath and after they have returned to work to help bring them back to their full potential.
If you’re readying your business for these changes to employment law due on 6th April, an all-in-one HR software solution can help. From comprehensive onboarding workflows that ensure statements of particulars are prepared in good time to tracking hours worked with an integrated clock-in system; Natural HR can do this and so much more.
Please note: while we here at Natural HR work with HR professionals every day, we are not lawyers. This post is a high-level summary of government changes to employment law coming into force later this year and should not replace sound legal advice available from professional solicitors or employment lawyers.
Article originally published by Natural HR
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Hiring experts constantly look for ways to build and preserve company culture and ensure that each and every employee feels cherished and respected in their work environment. Sometimes, the potential to enhance employee retention comes from your company benefits and team-building efforts. The perks you offer to each employee, and access to vacation days will contribute to making them feel more valued. At other times, however, that same potential hides in the least likely of places. This includes your payroll department and procedures – which includes so much more than simply their salary or their bonuses.
It encompasses everything from the way in which you handle taxes, ensure timely payments, utilise compensation for incentivising better performance and rewarding successful employees, all the way to how transparent you are with your payroll in general. Here are a few ways in which you can expect payroll to grow and empower company culture when used properly.
Nobody likes to wait. You don’t want your employees to feel the disquiet of anticipating their salary and then receive it a week later. If anything, you should aim to exceed your employees’ expectations. This is another segment of your business where you can show them how reputable and trustworthy your company is.
Your employees’ salary is one of the main symbols of success, but also of financial security, and if your business fails to live up to those security standards, chances are you’ll drive your employees away, into the arms of an employer who pays them in time, and in full – every time, no excuses.
A vital segment of building your company culture includes how your business is perceived based on your financial track record. Are you famous for always working with reputable vendors? Paying your taxes in full? Even using some of your profits to contribute to certain causes?
Managing your finances like a business is a multifaceted process. It allows your employees, but also the public, get a sense of what your brand stands for – and it should stand for integrity above all else. When you protect your reputation in such a way, you’re bound to inspire your employees to be your brand ambassadors. They are much more likely to stay loyal and recommend your business when you stick to your promises.
Your employees already experience plenty of stress in their daily lives, and you don’t want to add to it. If anything, you want to make sure that their compensation is a source of joy in every possible sense. This includes the way in which they are able to collect, use, and rely on their salary. In recent years, more companies are transitioning to modernised payroll systems that utilise automation as well as personalization.
For example, one of the benefits of the payroll card is that your employees can now avoid long waiting times and additional fees when they need access to their salary. It is a simple, yet effective way to make this process all the more convenient. This single decision shows that your business puts your employee first when choosing the most efficient, cost-effective solutions for their payroll processes. Taking out all the hassle from this process allows your employees to build stronger bonds with your brand.
If working for your brand means being valued and appreciated, you can rest assured that more employees will be eager to stay with your business for longer, and oftentimes recommend your brand as an employer to people they know and trust. Your payroll is the key ingredient in providing this sense of value and appreciation to your employees. When they always receive their salaries on time, and they always get the bonuses they worked so hard for, they will indeed know that their work is noticed and rewarded.
Ensuring optimal, if not competitive compensation, delivering it efficiently, and respecting your employees’ needs in the process all contribute to your team’s desire to stay true to your business. Keep in mind that such high levels of fairness enable companies to build a culture where people thrive and gladly put their best foot forward for each task.
Payroll may seem like yet another monotonous process that boils down to numbers and stamps. However, when found in the hands of the right HR expert, payroll becomes another empowering tool for your entire company structure, a way to build your reputation, and a key to employee satisfaction. Use it to help your company culture evolve and let it mimic all the values that your business stands for – it will inspire people to stay true to your business and bring other valuable assets to your doorstep.
Written by Lauren N. Wiseman.
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