The main provisions of the Good Work Plan come into effect today.
Firstly, a reminder of what had already been implemented previously:
Two changes took effect on 6 April 2019:
- All employees and workers became entitled to an itemised payslip setting out gross salary, deductions, and net pay. Where variable hours are worked, the employer also must include the total number of paid hours worked.
- The maximum penalty for aggravated breach quadrupled from £5,000 to £20,000.
With effect from 6 April 2020, the main changes are:
- All new employees and workers now have a “day-one” right to a new-type section 1 statement of written particulars from their very first day of employment (compare the situation previously, where employers had a two-month grace period to provide this, and to employees only). Lots of additional information must be included in the statement, including terms relating to normal hours of work (what days, whether fixed or varied start and finish times), duration and conditions of probation, eligibility for sick leave/pay, and details of non-pay benefits, etc.
- Existing employees whose employment started between 30 November 1993 and 6 April 2020 have the right to request a new-type section 1 statement. If they do, a compliant statement must be provided within one month.
- The holiday pay reference period has increased from 12 weeks to 52 weeks, which means that employers will have to look back at the previous 52 weeks where a worker has worked and received pay (ignoring any weeks where no payment was received) to calculate the average weekly pay on which holiday pay is based. This change should help to even out the variation in pay for workers, particularly those in seasonal or atypical roles.
- All agency workers are entitled to a key facts statement showing how much they can expect to be paid gross, what deductions will be made, and how much they are likely to receive net. The idea is that there will be no surprises when they get their pay packet. Additionally, they must be informed of any monetary benefits and annual leave entitlements.
- The ‘Swedish Derogation’ (aka Pay Between Assignment contracts, where agency workers accept a lower rate of pay but continue to be paid between assignments) has been abolished. Once agency workers have satisfied a 12-week qualifying period, they will be entitled to equal pay with non-agency workers (i.e. those engaged directly by the employer). Any agency workers who immediately qualify must be given a statement by 30 April 2020.
- The (surprisingly complicated) Parental Bereavement Leave Regulations have come into effect. Bereaved parents and primary carers now have the right to two weeks' leave following the death of a minor child, or a stillbirth after 24 weeks’ pregnancy (on or after 6 April 2020). Bereaved parents are entitled to take their leave in one two-week block, or in two separate blocks of one week. The leave must be taken before the end of a period of at least 56 days beginning with the date of the child’s death. There are additional provisions for intended and adoptive parents, foster parents, guardians and their partners, and even some close relatives and family friends.
Bereaved parents with a minimum of 26 weeks’ continuous service are also entitled to statutory parental bereavement pay. Those with less than 26 weeks of continuous service are entitled to two weeks of unpaid leave.
Finally, whilst it had been proposed under the Good Work Plan that IR35 rules would change with effect from 6 April 2020, the impact of the Covid-19 pandemic has been to postpone this change for 12 months: it will now take effect on 6 April 2021. The IR35 Rules apply when a worker performs services for a client through an intermediary (personal service company). For medium and large private-sector businesses, the decision as to tax status (employed or self-employed) will shift from the personal service company to the end user, the ‘fee-payer’ (i.e. the entity who pays for the individual’s services). Contracts and payment arrangements will need to be reviewed in early 2021 in anticipation of the changes.
Of course, this is necessarily just a brief overview. For more details or if you wish to instruct us to review your employment contracts and policies, please contact Roythornes' Employment team.