Employment law: 10 things you need to know

Patrick Day, associate director at Portfolio Payroll, explains the key legislative changes for employers and employees, highlighting compliance issues from the requirement for payslips for all workers to use of non-disclosure agreements and the increase in auto enrolment pension contributions

From gender pay gap reporting to changes in payslips, 2019 has already been a busy year for legislative changes. Although employers may hope the rest of 2019 is going to be quieter, it is looking likely that there will be a number of issues that are prevalent throughout the year, amid the ongoing uncertainty of Brexit.

Below are just 10 changes employers need to look out for. While there are sure to be other new developments introduced throughout the next year, employers would do well to keep a close eye on these particular topics and put plans in place to ensure their business complies with any new requirements.

1. Increase in NMW rates

Announced at Budget 2018, the National Living Wage (NLW) and National Minimum Wage (NMW) rates increased in April 2019. Under the new NLW, the minimum hourly rate that workers aged 25 and over are entitled increased from £7.83 to £8.21. At the same time, the NMW rate for workers aged between 21 and 24 increased from £7.38 to £7.70 an hour; the rate for 18-20 year olds increased from £5.90 to £6.15 an hour and those over compulsory school age, but not yet 18, saw an hourly increase from £4.20 to £4.35. The minimum rate for apprentices also increased from £3.70 an hour to £3.90 an hour, providing the apprentice is under the age of 19, or 19 and over, but in the first year of their current apprenticeship.

2. Auto enrolment contributions

From April 2019, the minimum contributions for auto enrolment pension schemes increased for both employers and employees. Minimum total contributions increased to 8% of employees’ pay with at least 3% coming from the employer. The employee must make up the difference between the employer’s contribution and 8%.

3. Payslips

Changes to the way employers issue payslips came into force on 6 April 2019 as from that date onwards the legal right to a receive a payslip was extended to include those who are recognised as ‘workers’. Employers are also now obliged to include the total number of hours worked on payslips for employees and workers whose wages vary depending on how much time they have worked. It is important that employers work with their payroll departments to ensure the correct procedure is now in place.

4. NMW for sleep-ins

Following 2018’s Court of Appeal decision on Mencap v Tomlinson Blake [2018] EWCA Civ 1641, a precedent was set that those working on sleep-in shifts, such as care workers, would not be entitled to national minimum wage (NMW) for time spent asleep in scenarios where they were ‘available for work’ and not ‘actually working’. The case has progressed to the Supreme Court which will now make a determination set to affect the rights of thousands of staff currently working sleep-in shifts.

5. Gender pay gap reporting

Private companies with 250 or more employees were again required to publish their gender pay gap figures on 4 April 2019. Although most employers will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in 2018 have been successful.

6. CEO pay gap reporting

New legislation came into force earlier in 2019 that requires quoted companies with 250 or more employees to publish their executive pay gap. Although the first reports are not expected until 2020 businesses should be calculating the necessary figures throughout 2019 to show the gap between the total amount paid to their CEO and the average pay for an employee.

7. Non-disclosure agreements

A consultation into the use of non-disclosure agreements in the workplace recently closed, with a response expected in 2019. These agreements, otherwise known as gagging clauses, were originally used to protect intellectual property when employees moved from one company to another. However, recent media coverage has highlighted the fact that they are often used to silence claims of harassment and bullying. While these agreements remain legal, the government’s response may go some way to restricting how they can be used in the future.

8. Supermarket equal pay claims

Later this year, we are expecting to see decisions on separate tribunal cases on the issue of equal pay which involve Tesco, Asda, Morrisons and Sainsbury’s respectively. Law firm Leigh Day is representing the employees in each of these cases and is seeking compensation for predominately female shop workers who feel they are unfairly paid less than predominately male warehouse staff, despite carrying out a similar role. This will provide more clarity on the issue of equal pay and, depending on the result, may pave the way for further claims from staff working in other sectors.

9. Good Work Plan

During 2019 there is likely to be more legislation drafted to implement the government’s Good Work Plan. It is already clear that significant changes will be made to the law on written contracts of employment from April 2020, but there is likely to be more clarity this year in the areas of employment status and the right to request more stable working hours.

10. Settled status for EU nationals

Brexit means that EU nationals working in the UK must obtain clearance to continue to work here legally after 2021; the application process to receive clearance opened fully in March 2019. Settled status will be granted to individuals if they can prove they have been living in the UK for five years by the date of application. Those with fewer than five years will receive temporary status, allowing them to remain until they have accrued a sufficient length of residency to be granted settled status.

About the author

Patrick Day is associate director at Portfolio Payroll, a specialist recruitment consultancy and a division of the Portfolio Group

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