Key Legislation and Changes to look out for in 2019

1 January 2019 - Executive Pay Gap Reporting

On 1 January 2019, legislation came into force requiring UK quoted companies with more than 250 employees in the relevant financial year to publish their gender pay gap/ pay ratio between their CEO and “average” employees and other key employee engagement information. Reporting will be essential on all financial years starting on or after this date. Therefore, the first companies are expected to publish mandatory executive pay ratio reports by early 2020.

Businesses will need to identify employees on the 25th, 50th and 75th quartile of pay when comparing employees’ pay to that of their CEO. The CEO’s figure must be the ‘single figure’ total remuneration that eligible companies are already legally obliged to publish in their annual directors’ report. There is an obligation to include bonus payments and share based incentives which could complicate calculations.

Although organisations do not need to report until 2020, affected companies should start gathering their data now and considering various matters as the rules apply to financial years beginning on or after 1 January 2019.

28 January 2019 - Online right to work checks: preventing illegal working

From 28 January 2019, employers will be able to rely solely on the Government’s online Right to Work checking service to check a migrants right to work in the UK and rely on this to avoid a penalty in some circumstances as carrying out this check will demonstrate they conducted the necessary right to work checks. The Home Office Right to Work checking service is available on GOV.UK. The service will only be available for verifying the right to work of some non EEA/ Swiss nationals. The service can be used by non-EEA nationals who hold biometric residence permits or biometric residence cards and EEA nationals who have been granted settled status under the EU Settlement Scheme. EEA nationals who do not have settled status under the EEA scheme will still need to demonstrate their right to work using the appropriate documents.

Employers who use this service will only be excused from the penalty if:

The check confirms the employee is allowed to work and undertake that type of work

The photograph on the online checking service is that of the employee

A copy of the check is retained for two years

In respect of students, details must be established of the course the are studying, institution, terms dates, holiday dates. This information must be obtained and retained.

29 March 2019 - Brexit

This is the proposed date the UK exits the EU.

1 April 2019 - New UK National Living and Minimum Wage Rates

The National Living Wage and National Minimum Wage are due to increase from 1 April 2019.

The revised rates that will take effect from 1 April 2019 are:

Adult Workers aged 25 and over to increase from £7.83 to £8.21.

Workers aged 21-24 to increase from £7.38 to £7.70

Workers aged 18-20 to increase from £5.90 to £6.15

Workers aged 16 and 17 to increase from £4.20 to £4.35

Apprentices aged under 19 or in the first year of their apprenticeship to increase from £3.70 to £3.90

The accommodation off set will increase from £7.00 to £7.55.

4 April 2019 – Gender Pay Gap Reports Due

All applicable businesses must publish their gender pay gap data for the snapshot date of 5 April 2019. The report must be published on the government website and a searchable UK website that is accessible to employees and the public.

6 April 2019 – Increases in Statutory Payments and Tribunal Awards

The maximum compensatory award for unfair dismissals taking effect from 6 April 2019 will increase from its current rate of £83,682 but the amount of increase has not yet been announced. A week’s pay (used to calculate statutory redundancy payments and the basic award in unfair dismissal claims) will also increase from its current rate of £508 (gross) but the amount of increase has not been announced yet.

6 April 2019 – Increase in Auto-enrolment contributions

From 6 April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Currently, automatic enrolment requirements mean employers must contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively; the total minimum contribution reaching 8%.

Employers must take action to ensure at least the minimum amounts are being paid and consult with staff appropriately. However employers do not need to take any further action if they don’t have any staff in a pension scheme or are already paying above the increased minimum amounts.

6 April 2019 – Increase in penalties for aggravated breach of a worker’s employment rights

Tribunals have the power to impose a financial penalty against employers that are in breach of employment rights where that breach has one or more aggravating factors. The maximum compensation will increase from £5,000 to £20,000.

6 April 2019 - Itemised Pay Statements to be extended to Workers/ The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018.

An employee has the right to be given by his/ her employer, et or before the time at which payment of wages or salary is made, a written itemised statement. From 6 April 2019, the right to an itemised pay statement will extend to every worker (as defined under the Employment Rights Act 1996), not just employees. The Payslips Legislation adds to the list of particulars which must be included in a pay slip/ statement. From April 2019, employers will be required to include on payslips the number of hours worked by the employee or worker for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked.

This requirement will not apply to wages or salary paid in respect of a period of work which commences before this date.

What are the penalties for failure to provide an itemised pay statement? An application can be made to the Employment Tribunal for a declaration of the failure to provide a fully itemised pay statement. The Tribunal can also award compensation if it finds that unnotified deductions have been made during the period of 13 weeks prior to the date of the application to the tribunal, whether or not the deductions were made in breach of the contract of employment.

7 April 2019 - Statutory Sick Pay and Statutory Maternity Pay are due to increase from 7 April 2019

The weekly rate for statutory sick pay is expected to increase to £94.25 from 7 April 2019.

The weekly amount for statutory family pay rates will increase £148.68 for 2019/20. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. 6 April 2020 - The Good Work Plan sets out Employment Law reforms following the Taylor Review

The Government has published details of the changes it proposes to make to employment law following the Taylor Review which takes into account the impact of digital platforms on modern working practices and the rights of workers. Many of the changes are intended to come into force on 6 April 2020.

Some of the key proposals are:

A right to a written statement of terms and conditions for all workers (which includes employees) from day one in their job. At present these have to be provided within 2 months. A change in legislation relating to continuity of employment. At present a week’s break between employment breaks continuity of employment. It is proposed that a gap of up to 4 weeks will not break continuity of employment.

Legislation to define make clearer the status tests of employment and to align the employment status tests used in the employment law and tax contexts to seek to reduce differences to an absolute minimum.

Where a worker has variable pay, the reference period for calculating an average week’s pay for holiday purposes will be increased from 12 weeks to 52 weeks.

Workers to have a right to request a stable contract/ more fixed working pattern after 26 weeks of service/ 6 months of work on a non-fixed pattern.

Repeal of the Swedish Derogation – this currently allows agency workers to be paid less than other permanent employees in certain circumstances.

Obligation on companies to provide specific information to agency workers.

Legislation to ban employers from making deductions from staff tips.

Legislation to oblige Employment Tribunals to consider the use of sanctions where employees have lost a previous case on broadly comparable facts.

Increase the maximum level of penalty that the Employment Tribunal can impose where there is aggravating conduct on the part of the employer to increase from £5000 to £20000.

There will be larger fines for employers who violate the law.

April 2020 - Parental bereavement leave to be introduced in 2020

The Government has confirmed that parents and primary carers who suffer the loss of a child will be entitled to at least two weeks’ paid parental bereavement leave from April 2020. The new Parental Bereavement Leave and Pay Act will give all employed parents a right from day one of employment who lose a child under 18 or suffer a still birth from 24 weeks pregnancy 2 weeks paid leave.


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