Government Reforms (1): April changes – Are you ready?

It’s nearly April and, as usual, this month sees a spring clean for employment law.  Although we’ve covered the majority of these changes in previous newsletters and alerts, we thought it was worth a quick reminder:

1 April 2019

Increase in National Living and Minimum Wage

The new rates are as follows:

• Age 25 and over: National Living wage increase from £7.83 to £8.21 per hour;
• Age 21 to 24 (inclusive): increase from £7.38 to £7.70 per hour;
• Age 18 to 20 (inclusive): increase from £5.90 to £6.15 per hour;
• Age 16 or 17 (inclusive): increase from £4.20 to £4.35 per hour; and
• Apprentice rate: increase from £3.70 to £3.90 per hour.

Changes to auto enrolment rates

The minimum contribution rates will increase to 3% for employers and 5% for employees.

4 April 2019

Gender pay gap reports due

Date by which all applicable private sector employers must publish their gender pay gap data for the snapshot date of 5 April 2018.

The report must be published on the Government website and a searchable UK website that is accessible to employees and the public.

6 April 2019

Itemised pay slips

The right to receive a written itemised payslip will apply to ‘workers’ as well as employees.  The payslips of workers and employees paid by the hour must clearly set out the number of hours for which they have been paid.

All payslips must include:

• the gross amount of the wages or salary;
• net amount of wages or salary payable;
• amounts of any variable or fixed deductions, and the purposes for which they are made; and
• total number of variable hours worked (when workers and employees get a different wage depending on the hours they have worked).

Government guidance on this new right is available here.

Assuming you already pay your (casual) workers via payroll, you will no doubt already give them itemised pay slips in the same way as your full employees.

But it is another useful reminder for us to say: are you entirely confident as to the differences between any casual workers and any zero hours employees you may have working for you?  And between casual workers and the genuinely self-employed?  It is a complex area, often neglected because of all the other things on your plates, but actually quite high risk as we see more and more focus on employment status.

Would you like us to have a look at your set-up and advise you on what would be the best arrangements?

6 April 2019

Increases in statutory payments and Tribunal awards

The limits on compensation awards will increase. The changes are as follows:

• The maximum limit for a statutory week’s pay (used to calculate statutory redundancy payments and the basic award for unfair dismissal) will increase from £508 to £525.
• The maximum compensatory award for unfair dismissal will increase from £83,682 to £86,444.
• The maximum basic award for unfair dismissal will become £15,750 (up from £15,240). That makes the maximum total basic and compensatory awards for unfair dismissal £102,194 (generally subject to a limit of 52 weeks’ actual pay).
• The minimum basic award for certain automatically unfair dismissals will increase from £6,203 to £6,408. (i.e. those due to due to health and safety, employee representative, trade union, or occupational pension trustee reasons).

The increases are based on a 3.3% increase to the retail prices index (RPI) as at September 2018.

The new rates take effect where the ‘appropriate date’ for the course of action, such as the date of termination in an unfair dismissal claim, falls on or after 6 April 2019. In cases where the date of termination falls before 6 April 2019, the old limits will continue to apply.

6 April 2019

Increase in penalties for aggravated breach of a worker’s employment rights

Tribunals have the power to impose a financial penalty against employers that are in breach of employment rights where that breach has one or more aggravating factors.

The maximum compensation will increase from £5,000 to £20,000.

 Tax changes

The personal allowance will increase to £12,500 and the higher rate tax threshold to £50,000.

Class 2 NICs will be abolished.

 

6/7 April 2019

Increases to the statutory rates for maternity, paternity, shared parental pay, adoption and sick pay

Statutory rates for everything other than sick pay will increase from £145.18 to £148.68 or 90% of average earnings if lower.

Statutory sick pay will increase from £92.05 to £94.25.

 

April 2019

Apprenticeship levy

Employers may transfer up to 25% of their apprenticeship levy to support apprentices in their supply chain.