LEGAL
Preparing businesses for employment law changes
Since 2000 the UK has seen a 63% increase in businesses operating and so, as new businesses continue to launch and as pre-existing companies strive for expansion, it’s important that employers are up to speed with, and prepared to implement, the key changes 2019 will see. Head of Employment Law at Banner Jones Solicitors Katie Ash (pictured) discusses what employers and employees need to know and the effects that the proposed changes will have.
From an employer’s perspective, it’s essential that all new legislation is enforced by the associated deadlines. However, understanding what the new rules mean - and how to ensure compliance - can be a tricky path to follow, especially when there are various new policies coming into play at around the same time.
EXECUTIVE PAY-GAP REPORTING Executive pay-gap reporting is due to come into force from 1 January 2020, with the data collection having begun on 1 January 2019. This means that, similarly to how gender pay-gaps are reported, UK companies that employ more than 250 members of staff are now required to publish the pay ratio between the CEO and ‘average’ employees – using members of staff on the 25th, 50th and 75th quartiles to compare. When calculating the figure
there are a number of considerations to take, the key one being the effect of the result on the reputation of the business which encompasses the perception of current and potential employees and clients. A strong PR strategy will allow any consequences to be dealt with effectively, should they be negative.
PAYSLIPS FOR WORKERS As of 6 April 2019, the legal right to receive an itemised payslip will be extended to all of those recognised as workers, including permanent, casual and zero hours employees. Whether written, printed or electronic, the payslips must detail how the payment was calculated in order to ensure clarity and transparency for all. From a legal perspective, should
different payments be allocated for different types of work, an itemised list which includes earnings before and after any deductions (i.e. National Insurance) will avoid confusion and pay disputes arising within a workforce.
60 business network February 2019
It’s important to understand new employment laws
GENDER PAY-GAP REPORTING Following on from its initial introduction in 2017, the second round of gender pay-gap reports are due on 5 April 2019. The same rules apply as previously outlined, however the Government is encouraging a more holistic action plan to be implemented to ensure the business landscape surrounding the roles of males and females in the workplace changes for the better, as well as the gender pay-gap.
NATIONAL MINIMUM WAGE, STATUTORY SICK, MATERNITY, PATERNITY AND SHARED PARENTAL LEAVE PAY INCREASES All employers must take stock that from 1 April 2019 National Minimum Wage is due to increase for all age categories and, similarly, from 7 April 2019, statutory rates for maternity, paternity, shared parental leave and sick pay are also increasing from £145.18/week to £148.68/week (or 90% of the
employees’ average weekly earnings if less than the statutory rate). These changes have been
welcomed by the Low Pay Commission (LPC) which has stated that: “The increase in the National Living Wage (NLW) to £8.21 in April 2019 will ensure a pay-rise for the lowest-paid workers that exceeds both inflation and average earnings.”
AUTO-ENROLMENT CONTRIBUTION INCREASE As per the set increases in pension scheme contribution from both employers and employees, organisations that currently only meet the minimum requirements must be prepared to impose percentage increases from April 2019.
Once enforced, the minimum
contribution for employers will rise from two per cent to three per cent and employee contributions will rise from three per cent to five per
cent - resulting in a minimum total contribution of eight per cent.
SETTLED STATUS FOR EU WORKERS AFTER BREXIT For EU citizens, the Government has recently confirmed plans for a three-stage settlement application process which is hoped will make the process streamlined, low-cost and user-friendly. Costing £170m, the scheme will
be compulsory for all EU citizens living in the UK, with individuals who have been in the UK for five years by the end of 2020 able to apply for ‘settled status’ and those who have arrived by 31 December 2020, but do not have five years’ residence, able to seek to stay in the UK until they have. From a legal perspective, getting
a head-start with understanding and implementing these new regulations will allow for a smoother transition and any issues encountered can be eliminated in good time ahead of impending deadlines.
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