Are your employment contracts ready for upcoming legal changes?
Employment Law Specialist Philip Sayers discusses upcoming changes to employment law and how Coodes Solicitors can help you be as compliant as possible.
A number of mandatory changes to employment law are coming into force in April 2020, which all employers need to be aware of and prepared for.
Some are annual changes, such as increases to National Minimum Wage. This year, the hourly rate for workers aged 25 and over is rising from £8.21 to £8.72.
The calculation of holiday pay for workers who have variable pay is also changing. The reference period will be increasing from the current 12 weeks to a full 52-week rolling period. HMRC will also be extending its reformed IR35 rules, which govern the taxation of people engaged to work for medium and large private employers as consultants through their own service company. This change was due to come into force in April but has now been delayed to the next tax year.
Employers should also ensure that all European Economic Area workers have obtained pre-settled or settled status. Workers have until the end of June 2021 to apply.
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Statement of Terms and Conditions
One of the main changes, however, is to the mandatory requirement to give each employee a Statement of Terms and Conditions pursuant to section 1 of the Employment Rights Act. These currently must be given to employees within two months of them starting a job and are often included within the employment contract.
From 6 April 2020, the two-month grace period no longer applies, and the Statement of Terms and Conditions will need to be provided to the employee either ahead of their start date or on the day they begin work. Ideally, this would be in the form of a contract of employment drafted beforehand and provided by the first day of work but if not then, as a minimum, the statement of particulars must be given.
In addition, there are changes to what must be included. An employer must list all remuneration the employee will receive, including discretionary bonuses along with expanded details on working hours and probationary periods.
The requirement to give a S.1 Statement of Terms and Conditions is extended to workers as well as employees. This will include most in-house consultants, who are deemed to be self-employed for tax purposes.
Anyone who regularly provides services personally for a business, forming a substantial part of their overall income, could be classed as a worker, even if they are not an employee.
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What Coodes can do to help
Coodes can help you to comply with the law by ensuring that your contract of employment and S.1 Statement of Terms and Conditions are compliant with these upcoming changes.
For a one-off fee of £500 +VAT, or £250 + VAT for existing clients, we will review existing contracts of employment, or S.1 Statements of Terms and Conditions, and discuss with you what alterations may need to be made to ensure your business is in line with the updated legislation.