Peninsula Associate Director of Advisory, Kate Palmer, discusses what changes employers should look out for in 2020
With just a few weeks left until the New Year, now is the perfect time for employers to look ahead to the crucial employment law changes that are set to impact 2020 and their workplaces.
CEO pay ratio reporting
From 1st January 2020, certain employers will be required to include information relating to their CEO pay ratio within directors remuneration reports. UK listed companies who have in a year, on average more than 250 employees are expected to compare their CEO’s most recent remuneration against that of their full-time employees.
Change to contracts
The law around employee contracts will change from 6th April 2020, meaning contracts will become a day one right for employees and workers. Contracts will also need to contain additional details for the first time, including entitlement to family-friendly leave, clarification of any probationary periods and confirmation of which specific days and times individuals are required to work.
Extension of holiday pay reference period
The holiday pay reference period, which is used to calculate the average pay of those who work irregular hours, will be extended from 12 to 52 weeks as of 6th April 2020 and is sure to lead to a change in the way payroll departments calculate holiday pay. Employers will need to keep track of employees’ working time throughout the year, including overtime. Keeping check of an employees’ working time ensures they are remunerated correctly while on annual leave.
End of Swedish derogation contracts
Employers will no longer be able to make use of Swedish derogation contracts from 6th April 2020 as these contracts, which allow employers to avoid providing agency workers with equal pay after 12 weeks’ of an assignment, will become unlawful.
Agency Workers’ Key facts’ page
From 6th April 2020, we expect that agency work-seekers will have a right to receive a key information document to help them make informed choices about the work they accept. This document is required to clarify specific matters, including the type of contract the worker is employed under and their minimum rate of pay.
Lowering consultation threshold
The percentage of employee support needed to set up information and consultation arrangements is set to reduce from 6th April 2020. From this date onwards only 2% of the overall workforce needs to be behind this measure, as opposed to the previous 10%. This reduction is designed to give employees a greater voice in the actions of an organisation and increase overall engagement.
Increase to minimum wage
As national minimum wage (NMW) rates are reviewed each year, it is reasonable to expect an increase to the existing rates in April 2020. After all, the government have already pledged to ensure those aged 25 and over will be entitled to a minimum of £10.50 per hour by 2024, meaning NMW employers are likely to be required to adjust their pay practices in the New Year.
Change to statutory rates
The minimum rates on offer for statutory entitlements such as maternity pay, paternity pay and sick pay will also be reviewed in April 2020. Much like NMW, these amounts typically increase each year, and any subsequent announcements are likely to require employers to amend their approach.
Parental bereavement leave
The right to parental bereavement leave will become effective in April 2020. Although the government have not confirmed an exact date, we know that qualifying parents will be entitled to two weeks of paid bereavement leave following the death of a child under the age of 18 to help with the grieving process.
Although there have been no fixed implementation dates, the government have pledged to improve redundancy protection for working mothers and alter existing legislation around the use of non-disclosure agreements. We are also expecting the results of separate consultations on preventing sexual harassment as well as restructuring the availability of family-friendly entitlements and statutory sick pay. However, it is worth remembering that much of this may depend on the result of December’s general election.