There are a number of important legislative changes that are due to come in to force on 6th April 2020. In this article we have highlighted the most important and identified the steps you should be taking now to prepare.
Holiday pay reference period
At the moment, for individuals with no normal working hours or for those with normal working hours but whose pay varies depending on the amount of work done, you calculate their holiday entitlement as an average over the preceding 12 week period. With effect from 6th April 2020 however this reference period is being extended to 52 weeks.
The change is designed to ensure that workers whose hours and/or pay vary over the course of a year receive holiday pay that is truly representative of their entitlement to paid time off. If you take the example of seasonal workers, they may be particularly busy over the summer months and if they took holiday straight after this busy spell their holiday pay would be higher than if they took a similar period of leave in the winter months when they may have been working much less.
When calculating an individual’s holiday pay you must disregard any weeks in which they did not receive work or pay and count backwards up to a maximum of 104 weeks to capture the relevant 52 week period. For those workers with less than 52 weeks service, the reference period will be the actual number of weeks for which they have been employed.
This is quite a significant change to holiday pay calculations for workers with either no normal working hours or those whose pay varies depending on the amount of work done or the times or days on which they work. You need to make sure your payroll processes are changed to ensure you pay the correct amount of holiday pay.
Good Work Plan – Section 1 statement
A key part of the Government’s “Good Work Plan” is the extension of the right to a section 1 statement. Under the current rules, employers are required to provide employees who have been continuously employed for more than one month with a statement of their key terms of employment. This statement must be provided within the first two months of employment. From 6th April 2020 however this right will be extended to all workers, not just employees, and will become a day one right.
This will inevitably impose additional administrative burdens on employers who will need to make sure they have their contractual documentation ready to be issued ideally before but at the very latest on the first day of employment.
In addition to the above, the changes will also see an extension in the level of detail required in a section 1 statement so that employers will need to provide more information, including the following:
- Details of any probationary period including its duration and any conditions that attach to it;
- Any training the individual is required to complete along with details of any training the employer will not pay for;
- Details of specific days and times of work;
- Anticipated length of the job;
- Any paid leave the individual is entitled to including maternity and paternity leave.
Some of the information can be provided in a separate document, such as sick pay, paid leave and pensions, but the majority will now need to be included in one document. Lots of employers include their section 1 statements within their contracts of employment. If that is the case it may be your contracts already contain much of the additional information required. You will need to review your contracts and/or section 1 statements now and update them as necessary to ensure they are compliant.
The right to receive the enhanced statement will only apply to new employees and workers who start work on or after 6th April 2020 but existing employees will be entitled to request updated particulars if they wish. If an individual makes a request an employer will have one month within which to comply.
It is worth noting that any failure to provide an adequate section 1 statement will not give rise to any free-standing claim in the Employment Tribunal and can only be piggy-backed on another claim such as unfair dismissal. If successful with a claim however an individual can recover up to four weeks’ pay.
Paid parental bereavement leave
The Government confirmed last week that paid parental bereavement leave will come in to effect on 6th April 2020. It will give all employed parents the statutory right to 2 weeks’ parental bereavement leave if they lose a child under the age of 18 or suffer a still birth from 24 weeks of pregnancy. The leave will have to be taken within 56 weeks of the child’s death and may be taken in blocks of one week or two. Employees with at least 26 weeks’ of service will qualify for Statutory Parental Bereavement Pay which will be set at the same rate as Statutory Paternity Pay (£151.20 per week or 90% of earnings whichever is the lowest).