With Brexit dominating the headlines and the government considering various consultations and recommendations, there are many employment law changes in the pipeline. However, employers should be aware of the following updates now, as we move into the 2019/2020 tax year.

This April marks an important time for all workers on zero hour and variable contracts who now have the right to receive an itemised pay slip. Employers will also be required to provide additional information in itemised pay slips detailing the total number of paid hours worked where the pay varies in direct relation to the amount of time worked.

Additionally, employers should ensure they are using the updated HMRC New Starter Checklist which reflects the introduction of Post-Graduate Loans (PGL). HMRC have not updated the P45, so employers should ask all employees to complete the New Starter Checklist, regardless of whether they have provided a P45. This will enable your payroll function to differentiate between the different types of educational loans.

Unless otherwise stated, with effect from 6 April 2019 the following changes in statutory rates for payments will apply – both during and after employment has ceased.

National Minimum Wage Entitlements

From 1 April 2019, the National Minimum Wage increases to:

  • Age 25+ (National Living Wage): £8.21 ph
  • Age 21+ (Standard adult rate): £7.70 ph
  • Age 18-20 (Development rate): £6.15 ph
  • Age 16-17 (Young Workers rate): £4.35 ph
  • Apprentice Rate: £3.90 ph
  • Accommodation offset limit (max daily deduction from NMW): £7.55 ph

Statutory Sick Pay (SSP) Entitlement

The SSP scheme entitles qualifying employees who have been absent from work for four or more consecutive days (including non-working days) to receive a minimum weekly payment. Employees are entitled to up to 28 weeks’ SSP in any period of incapacity for work.

The rate of SSP effective from 6 April 2019 will be £94.25 per week. The lower earnings limit will also increase from £116 to £118 per week.

Family Friendly Entitlements

The below Family Friendly Pay entitlements are effective from April 6th 2019.

Statutory Maternity Pay

  • First 6 weeks – 90% of average weekly earnings before tax
  • Following 33 weeks – £148.68 or 90% of their average weekly earnings (whichever is lower)

Statutory Paternity and Secondary Adopter Pay

  • 2 weeks – £148.68 per week, or 90% of average weekly earnings (whichever is lower).

Statutory Adoption Pay

  • First 6 weeks – 90% of average weekly earnings before tax
  • Following 33 weeks –£148.68 per week or 90% of normal earnings (whichever is lower)

Maternity allowance (for women who are not entitled to SMP)

  • Up to 39 weeks – £148.68 per week or 90% of normal earnings (whichever is lower)

Shared Parental Pay

  • Up to 39 weeks, less any weeks spent by the child’s mother or adopter in receipt of SMP, MA or SAP – £148.68.

The ‘normal earnings’ are calculated based on the employee’s earnings during the eight-week period prior to the qualifying week (the qualifying week is the 15th week before the expected week of childbirth).

Compensation

  • Compensatory Award – the award for “ordinary” unfair dismissals will increase from £83,682 to £86,444 (or a year’s pay, whichever is lower). For certain automatically unfair dismissals, for example, health and safety or whistleblowing, the award is unlimited.
  • Minimum basic award for certain unfair dismissals relating to health and safety, employee representative, trade union and occupational pension trustee reasons – Increase from £6,203 to £6,408.
  • Statutory redundancy and basic award – Maximum statutory cap on a week’s pay increases from £508 to £525.
  • Bands of awards for injury to feelings ‘Vento bands’ – increase from 6 April 2019 to: Lower band – from £900 to £8,800. Middle Band – from £8,800 to £26,300. Upper band – from £26,300 to £44,000.
  • Interest on discrimination awards –  8%
  • Compensation for breach of contract (such as awards for wrongful dismissal at an Employment Tribunal) – up to £25,000
  • Payments in Lieu of Notice – taxable at the normal tax rates

Where the employment tribunal holds that workers’ rights have been breached by employers that have shown malice, spite or gross oversight, employers can be subject to pay an additional penalty. From the 6th April 2019, the upper limit to this penalty will increase from £5,000, to £20,000.

Other Statutory Obligations

  • 30th March 2019 – deadline for gender pay gap reporting by public sector employers with 250 or more employees
  • 4th April 2019 – deadline for gender pay gap reporting for private sector employers and voluntary organisations with 250 or more employees
  • Deadline for application for settled status will be 30 June 2021, or 31 December 2020 if the UK leaves the EU without a deal.

New legislation expected

The government has announced plans to ensure that tips left for workers will go to them in full.

The government will consider creating a duty for employers to consider whether a job can be done flexibly, and make that clear when advertising.

If you have questions on any of the above or require assistance with implementing or devising policies, reach out to Tassic.