What is happening on 6th April 2020? What you need to know….
by SuzieBusiness Owner & Senior HRBP
This is the date that new employment leglisation and statutory rates change.
Here is our summary and a brief note on what you may have to do next…
Section 1 Statements
Firstly, what are they? This is basically the information you need under law to give a new employee in writing. It is usually contained in the contract of employment and/or the employee handbook. The key change is that new employees will be entitled to this information from day one of employment and as a general rule should be in the same document.
The Government has also added to the information you need to give in a Section 1 Statement e.g. probation period, any paid leave or any benefits. If you have a template contract of employment or an employee handbook from us, don’t worry – it is all handled and you are already compliant. If you have our HR administration service we will make sure your new employees get the right documents before they start work.
If you are not a client of Breathing Space HR – you should have a look at your contract of employment and associated documents to check you have everything there. If they are not complete you will also have to go back and review for your current employees as this obligation to give more information is retrospective.
Bereavement Leave or “Jack’s Law”
This is a new benefit for employees from 6th April 2020. Jack’s Law 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 two weeks of paid leave at the statutory rate and other employees will be entitled to unpaid leave.
You will need to update your employee handbooks, Breathing Space HR clients will have this done automatically. Remember to give us a call for advice if this terrible thing happens to one of your employees.
Changes to holiday pay calculations
From 6th April 2020, the reference period to calculate a ‘week’s pay’ for holiday pay purposes will be extended from the previous 12 weeks of work to the previous 52 weeks.
This effects how flexible workers and zero houred employees have their holiday pay calculated. You will need to review any spreadsheets used to calculate these payments. Some HR professionals will use a percentage of 12.07%, this is not as reliable as you think and it is better to go back to the data for each individual over 52 weeks to ensure a fair and equitable calculation.
Remember to include overtime, commission or bonuses in the total pay for the 52 week reference period.
“Arghhh! IR35!!” I hear finance and HR people shouting in frustration!
I remember when the first IR35 rules came in in 2000. I feel old…. (or should I say experienced?)
Please see our specific blog on the new IR35 to see if they apply to your organisation.
Increases in Statutory payments
Statutory sick pay from £94.25 to £95.85 per week.
(Remember if you pay contractual/company/full pay when people are off sick, you mean to make sure your policy and/or contract include a statement that SSP is included in the payment.)
Statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay from £148.68 to £151.20 per week.
Statutory redundancy payment increases to £538.00 a “week’s pay”
You will need to reflect these changes in your policy if you have described the statutory rates.
For workers aged 25 or over – £8.72 per hour
National Minimum Wage
For workers aged 21 but not yet aged 25 – £8.20 per hour
For 18 to 20-year-olds – £6.45 per hour
For 16 to 17-year-olds – £4.55 per hour
For apprentices – £4.15 per hour
If you are looking at the living wage, remember to think about “differentials”. This is what we call the difference in different levels of employee, “grades” are another term used. When looking at a minimum rate increase if you don’t review all the salaries and rates going up your organisation you will erode the differences between the levels of employee and effectively you fail those who are not on your minimum rate and don’t compensate them correctly for the work that they do. It is not a legal requirement to do this, but it will de-motivate your mid-level employees who manage teams and potential lead to them considering leaving for better paid jobs.
Each year, Breathing Space review the living wage and differentials for our integrated clients and with Finance teams calculate proposed increases in the pay bill for our clients.
Real Living Wage
For comparation purposes, the Living Wage Foundation has set its recommendations on the real living wage:
£9.30 per hour across the UK
£10.75 in London
This calculation is based on the cost of living, based on a basket of household goods and services and applies to all employees over the age of 18 years.