Jan 2019 – Important Employment Law Changes & Minimum Wage Guidance
Employment Update for Small Businesses
Happy New Year!
In our first update of 2019 we have news of some important changes in employment law which were announced just before Christmas. Also, as minimum wage compliance becomes ever more challenging, particularly in the care sector, we report on some new guidance. Read on for more.
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.
Please forward this email to any of your contacts who might find it of benefit.
The Government has published a series of proposed changes to employment law under the banner of The Good Work Plan and they have already laid a number of pieces of legislation before Parliament to bring some of them into force (although mostly not until April 2020).
The key changes coming in from 6th April 2020 are:
The timescale for an employer to provide a written statement of employment particulars to a new starter is being reduced. Currently this must be provided within two months of the start date, but from April 2020 it will have to be provided by no later than the first day of employment (we always advise you to issue it before they start in any case, to avoid confusion).
Also, the written statement will have to be supplied to workers as well as employees (this may include casuals and anyone else who works personally for you but is neither an employee nor genuinely self-employed).
The calculation of a week’s holiday pay for workers with variable pay will be changed, so that an average of their pay over the preceding 52 weeks must be used, rather than then current 12 week period.
Further proposed changes which have not yet been confirmed in legislation include:
Changing the law on continuity of employment. Currently a break in work of one week or longer, will be sufficient to fully sever employment so that the previous service no longer counts. This will be extended to four weeks.
Streamlining the legal tests for employment status so that they are the same for both employment law and tax purposes. Some of the recent cases have shown that HMRC is more ready to accept people are self-employed for tax purposes than employment judges are for employment law claims.
There is little doubt that employment law is becoming much more challenging for employers, particularly those smaller employers who do not have their own in-house HR resource. So please do contact us if you need any help. We are always happy to have a free chat without obligation.
New Guidance on Minimum Wage for “Sleep-in” Shifts
Are you paying your night staff correctly?
The Department for Business Innovation and Skills has recently produced updated guidance on the National Minimum Wage and the National Living Wage. This includes guidance on dealing with staff on “sleep-in” shifts. These are common in the care sector, where carers are required to sleep on the premises in order to be available in case of emergency or urgent need. This has been an area of confusion for many years now, as the unions have pressed for such time to be treated as working time for minimum wage purposes, and there have been a number of differing judgments arising in the courts and tribunals.
This guidance states the current position (see page 41) but does point out that this may change as the latest case may yet be appealed at the Supreme Court.
One thing to note is that you definitely do not have to pay the minimum wage for every hour that someone is on a shift (“sleep-in” or otherwise). You just need to make sure that the average hourly rate calculated over the relevant pay reference period (i.e. the month for monthly paid and the week for weekly paid) is at least the level of the minimum wage. So it may be that if your staff are paid above the minimum wage when on a normal working shift, but below for “sleep-in” shifts, that overall they are paid correctly.
Please contact us if you need any help calculating the minimum wage. The penalties for getting it wrong can be very severe, so it is worth spending some time on this matter.
National Minimum and Living Wage Rates
The current National Living Wage and National Minimum Wage rates are:
£7.83 per hour for workers aged 25 and over
£7.38 per hour for workers aged 21 to 24
£5.90 per hour for workers aged 18 to 20
£4.20 per hour for workers aged 16 and 17
£3.70 per hour for apprentices under 19 and those over 19 in their first year*
*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.