Employment Law Changes 2019

As Spring arrives so do the first employment law changes of the year. April is the time when most of the changes take place with some following later in October. For 2019-2020 there are lots of changes so we will cover the main ones below.

Pension contributions

From 6 April 2019, both employer and employee minimum pension contributions have increased. Employee contributions have increased from 3% to 5% and employer contributions have increased from 2% to 3%.  This makes the total contribution 8% – previously only 5%.

This may be one of the slightly more controversial changes with employee opinion divided depending on personal circumstances and employer opinion divided depending on affordability. For employees who are concerned about their 2% increase, they are able to opt out of their pension scheme and they can then re-join in the future.

Pay slips

Two new changes relating to pay slips were introduced on 6 April 2019.  The changes apply to pay slips for the pay period starting on or after this date.

The first change is that the right to receive a pay slip is extended to all workers and not just employees.  This includes casual and zero hours workers.

The second change is that pay slips must now be itemised.  For workers whose pay varies depending on the number of hours they work, the pay slip must specify the number of hours they have been paid for.  This will be particularly useful for casual or zero hours workers whose hours and pay will vary from month to month.  Likewise, if a worker has a fixed salary each month but works variable overtime on an hourly rate, the number of hours’ overtime should now be shown on the payslip.

The aim of this change is to make it easier for workers to check if they have been paid correctly.

Minimum wage increases, sick pay and family rates

Minimum wage rates increased across the board from 1 April as follows:

2018 – 2019 2019-2020
Age 25+ £7.83 £8.21
Age 21-24 £7.38 £7.70
Age 18 – 20 £5.90 £6.15
Age 16 – 17 £4.20 £4.35
Apprentices £3.70 £3.90

 

The Living wage (not to be confused with the statutory National Living Wage shown above for age 25) has increased separately from £8.75 to £9.00 but is optional for employers to opt into.

Other statutory payments have also increased, this includes family rates, sick pay rates and lower earnings limit. These rates are as follows:

2018 – 2019 2019 – 2020
Maternity pay £145.18 £148.68
Adoption pay (max) £145.18 £148.68
Paternity pay (max) £145.18 £148.68
Shared parental pay £145.18 £148.68
Sick pay £92.05 £94.25
Lower earning limits £116.00 £118.00

 

Employment tribunal award limits increase

The limits applying to various tribunal awards have increased for payments occurring after 6 April. The unfair dismissal maximum compensation rate has increased from £83,862 to £86,444.

Brexit

At the time of writing, EU leaders have granted the UK a 6 month extension to Brexit, taking the new deadline to 31 October 2019.  However, we remain in a state of uncertainty so it is difficult to predict what changes will actually take place.  This note is therefore relevant at the time of writing but we will continue to keep our readers updated with the impact of Brexit on employment law as it develops.

Much of employment law in the UK is derived from EU law.  However a complete overhaul or even significant changes are not anticipated because whilst the European Union (Withdrawal) Act 2018 is due to repeal existing EU laws, it will then convert them into domestic UK law through Acts of Parliament. However, without these laws being derived from EU law, there is the possibility that any of these employment laws could be changed by future Parliaments.

The following is a list of employment rights that derive from EU law –

  • Pregnancy and maternity rights (mixture of UK and EU)
  • Parental leave
  • Working time
  • Holidays and holiday pay
  • Collective redundancy consultation
  • TUPE
  • Rights on insolvency
  • Agency workers
  • Discrimination (extended by EU law)
  • Fixed term employees protections
  • Part time workers protections
  • Data protection

The other area of Brexit that may impact employers and to be aware of are the rules surrounding immigration.  EU citizens and their families will have to apply for “settled status” or “pre-settled status” to remain living and working in the UK after 30 June 2021. The Settlement Scheme is already open.

Settled status – for EU nationals residing in the UK before 31 December 2020 (or by the date the UK leaves the EU without a deal), they are able to apply once they have lived here for a continuous five year period. This allows them to live and work in the UK indefinitely.

Pre- settled status – for those without five years residency, they can apply for pre-settled status until they reach the five year milestone at which time they can apply for settled status.

The application process is intended to be as easy as possible with an online form to be completed and then records will be examined via HMRC to make the decision.

Advice for employers at this early stage is to be aware of any employees who might fall into this category. Employers should remind EU nationals to apply for settled or pre-settled status.  When the time comes, employers could assist employees through the process if necessary. The scheme closes 30 June 2021 so anyone who has not applied by this time will no longer be able to.

The other thing employers should be aware of is any risks of discrimination and a change in attitude towards any EU nationals. Ensure they feel supported and a valued part of the team.

 

If you have any questions or require assistance with any part of this article, please contact us at adelle@am-employment-law.co.uk.