Business update – it’s all happening this month
Andrew Egan from Andrew Egan Associates on the latest changes to employment law
SMALL to medium-sized businesses and their HR professionals need to ensure that their organisation is on top of changes in employment law that are taking place this month, writes Andrew Egan of Andrew Egan Associates.
These changes include increases in national minimum wage rates, gender pay gap reporting deadlines, increases to statutory redundancy pay and maternity pay and more. National minimum wage rates increased from the April 1, 2022. The hourly rates of the minimum wage increased from: n £8.91 to £9.50 for workers aged 23 and over (the national living wage); n £8.36 to £9.18 for workers aged 21 or 22; n £6.56 to £6.83 for workers aged 18 to 20; n £4.62 to £4.81 for workers aged under 18 who are no longer of compulsory school age; and n £4.30 to £4.81 for apprentices under 19, or over 19 and in the first year of the apprenticeship.
Statutory maternity, adoption, paternity, shared parental weekly pay rates and parental bereavement pay increased from £151.97 to £156.66. The increase took effect on April 3, 2022.
The weekly rate of statutory sick pay also increased on April 6, 2022, from £96.35 to £99.35.
HR need to make sure that staff on maternity, paternity, adoption, shared parental and parental bereavement leave, and staff on sick leave are paid these statutory minimum rates.
HR professionals also need to review their policies and documents which mention these rates.
The extension of the IR35 rules on off-payroll working to the private sector took effect on April 6, 2021. However, HMRC stated that it would be “taking a light touch” to enforcement penalties during the first 12 months of the new rules, unless it had evidence of deliberate non-compliance. Under the new rules, the organisation engaging a contractor is responsible for determining their employment status and assessing whether IR35 applies.
If IR35 does apply, the organisation who pays the individual’s fees is deemed to be their employer for tax and national insurance purposes. Another change in employment law is that the enforcement “grace period” no longer applied from April 6, 2022.
In any event, employers should regularly review the status determinations of contractors to ensure they are still accurate.
There are also changes to
right to work checks. Employers can carry out a document check or, depending on the circumstances, use the Home Office online right to work service.
For document checks, original documents must normally be seen by an employer, but a temporary relaxation has allowed employers to make checks remotely because of the pandemic.
This temporary measure has now been extended to the end of September 2022.
Some individuals cannot evidence their right to work through the Home Office online service, and so the employer must carry out a document check.
A digital identity checking service is being introduced so that British and Irish citizens with valid passports or Irish passport cards are able to evidence their identity remotely, even when the coronavirus relaxation ends. New limits on statutory redundancy pay came into force on April 6, 2022. Employers who dismiss employees for redundancy must pay those with two years of service an amount based on the employee’s weekly pay, length of service and age.
The weekly pay is subject to a maximum amount, which is capped at £571 from April 6, 2022.
HR professionals should also remember that for any redundancies taking effect on or after April 6, 2022, statutory redundancy payments will need to be recalculated in line with the increased limits. Employment tribunal awards also increased from April 6, 2022.
The maximum basic award for unfair dismissal increased to £17,130.
The maximum compensatory award for ordinary unfair dismissal increased to £93,878. The minimum amount of unfair dismissal basic award for trade unions, health and safety, working time representatives, pension scheme trustees and employee representative dismissals increased to £6,959.
The Easter break can also be a good time to review and update your staff contracts, handbooks, policies and procedures.
We take a proactive approach to helping our clients, so if you would like advice regarding the changes to employment laws or updating your employment contracts, policies and procedures, please call Andrew Egan on 07904 391756 or (01635) 890560.