Employment law in 2019
25 December 2018
This article was featured in the February 2019 issue of the magazine.
Danny Done, managing director at Portfolio Payroll, looks ahead
The start of the new year is often regarded as a time for change, allowing employers to refocus and plan out their business objectives for the year ahead. With this in mind, we take a look at some of the forthcoming developments in employment law scheduled for 2019 that employers must be aware of.
Whilst the ongoing political uncertainty may make it hard to predict exactly what will happen after ‘Brexit day’, on the 29 March 2019, it has been confirmed that European workers currently living in the UK will be able to apply for settled status in 2019 granting them the right to remain indefinitely in the UK after 2021. To be granted settled status individuals must be able to prove they have been living in the UK for five years by 31 December 2020. Those who do not meet this requirement can apply for temporary status, allowing them to remain until they have accrued enough residency to be granted settled status. Although much of this will depend on the UK’s ability to reach a deal with the European Union (EU), employers whose workforce contains a significant number of EU workers should strongly consider distributing material containing key information regarding the settled status procedure.
Having been announced as part of the government’s 2018 Autumn Budget, 1 April will see an increase to the statutory national living wage meaning those aged 25 and over will be entitled to receive £8.21 per hour, up from £7.83 an hour previously. At the same time, the national minimum wage rates for workers aged between 21–24 will increase from £7.70 to £7.83 an hour; the rate for 18–20 year olds will increase from £5.90 to £6.15 an hour and those over compulsory school age but not yet age eighteen will get an hourly increase from £4.20 to £4.35. In light of these changes employers must make sure these rates are reflected correctly in employees’ salaries for pay reference periods beginning on or after 1 April, especially as recent ‘naming and shaming’ exercises have shown the government’s commitments to punishing minimum wage offenders.
April 2019 will also see an increase to the lower earnings threshold and weekly amount for those who receive statutory sick pay (SSP). Employees who receive average weekly earnings of £118, up from £116 previously, will be eligible for SSP and then receive £94.25 per week as opposed to the previous rate of £92.05. The statutory weekly rates for maternity, paternity, adoption and shared parental pay will also increase at this time, rising from £145.18 per week to £148.68 (or 90% of the employee’s average weekly earnings if this figure is lower than the statutory rate). Again employers need to ensure they are paying staff in accordance with these new rates, giving extra consideration to those who are on long-term sick or part-way through a period of leave when these rates come into effect.
...fresh look at how they monitor and record working time...
Private sector organisations with 250 or more employees will again be required to publish their gender pay gap figures on 4 April 2019, whilst public organisations will need to do the same by 30 March 2019. Although many 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 the previous year have been successful. Much has been made about employers’ failure to report their gender pay gap figures on time in 2018; and with talks ongoing regarding stricter penalties for those who continue to miss the reporting deadline, employers would be wise to resist leaving this duty until the last minute.
Employers will also need to review, and potentially change, the way they issue payslips in 2019 as from 6 April the legal right to a payslip will be extended to include those who are recognised as ‘workers’. Employers will also be obliged to include the total number of hours worked on payslips for staff whose wages vary depending on how much time they have worked. Payroll departments in particular have a big role to play here and employers may want to take a fresh look at how they monitor and record working time to avoid any pay discrepancies.
Additionally, from 6 April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Under these new requirements employers must contribute a minimum of 3% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 5% themselves.
Although there are bound to be other additional developments introduced throughout 2019, employers are advised to keep a close eye on these particular topics and ensure provisions are in place to remain complaint with any new requirements.