It's not just about the numbers!
Updated: Mar 7, 2020
Firstly the disclaimer....! I am by no means an expert on employment law, so if you think that any of the changes mentioned below may effect you or your business, I would recommend doing some more research to familiarise yourself with the latest guidance.
It's helpful for accountants and bookkeepers to have a broad knowledge of issues which may effect their own business and more importantly those of their clients so that they can anticipate issues which may effect their client, flag them up and analyse any potential financial impact or change in processes
which may be required. Sometimes you can feel like a 'jack of all trades', hopefully though, not a master of none!
With this in mind, this week I attended a webinar, (is 'attended' the right word when it comes to a webinar? ...discussion for another time!), run by BrightPay, a provider of payroll software, which I use. The webinar covered key employment law changes for 2020, most of which are coming into effect from 6 April 2020, so I thought would just summarise & share these here for any clients, colleagues or friends who are interested....
Written particulars of Employment are changing. Essentially this refers to contracts of employment and the changes effect who is entitled to receive them, the time-frame by which they should be provided and what information must be provided. The changes will apply to all new employees and workers starting from 6 April 2020. Existing employees can request an updated contract, in line with the new legislation, which must be provided with 1 month of the request and if for any reason the employer needs to alter a contract of employment, they will need to make sure that the revised contract complies with all the new information requirements, not just the element they need to alter.
Holiday Pay reference period is changing. This is a change to the way holiday pay is calculated for workers with no regular working hours, extending the reference period used from 12 weeks of service, to 52 weeks (or the number of complete weeks of service, if less than 52 weeks). These changes will particularly effect workers whose hours are subject to seasonal variations.
Removal of Swedish Derogation. Abolition of the derogation will mean that agency workers are entitled to the same working and employment conditions, (including pay), as direct recruits of the same business, once they have 12 weeks of continuous service for the same role, with the same hirer, also referred to as pay parity.
Parental Bereavement Leave. New entitlement to a minimum of 2 weeks leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy.
Changes to employment termination payments. Any payments in excess of £30,000 will now be subject to 13.8% Class 1 NICs, in addition to income tax.
Minimum wage rates are increasing from 1st April 2020. https://www.gov.uk/national-minimum-wage-rates
IR35. Rules regarding off-payroll working which may effect the income tax & NI liability of some workers providing their services through an intermediary i.e. their own personal services company, rather than directly as an employee. This legislation does not apply to organisations qualifying as small businesses. https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
As already mentioned this is very much a 'heads-up' summary of some key changes coming up. There is a lot more detail behind most of these issues, so please do investigate further if you are likely to be effected by them.