Employment law 2024 | Horizon scanner

Holiday pay

The Regulations came into force on 1 January 2024 and provide for the following developments:

• “Rolled up” holiday pay (calculated at the classic 12.07% rate) has returned as an option for holiday pay calculation for casual, irregular-hours and part-year workers. Rolled up pay will be available for leave years starting on or after 1 April 2024.
• Types of payments that should be included in “normal rate of pay” when calculating holiday have been specified, for example payments related to the performance of tasks (including commission payments) and regular overtime should be included.
• Automatic rights to carry-over of holiday for workers in certain situations e.g. inability to take holiday due to sickness and statutory family leave.

Working Time Regulations record keeping

Employers are required to keep “adequate” records of time worked by employees. This does not necessarily mean a full record of all daily working hours, but steps should be taken to ensure compliance with working time rules can be demonstrated.

Repeal of covid-19 carry-over regulations

Covid-era rules (introduced in 2020) surrounding the ability to carry-over annual leave have been repealed. Any accrued annual leave, carried over during the period since 2020 under the previous Covid legislation must be used by 31 March 2024 or it will be lost.

TUPE reforms

The requirement to elect employee representatives has been relaxed, meaning that employers can consult directly with their employees if there are no existing worker representatives in place for:

• Employers with fewer than 50 employees.
• Employers of any size involved in a transfer of fewer than ten employees (for transfers taking place on or after 1 July 2024).

Action points:

1. Employers of casual, irregular, and part-year workers should carefully familiarise themselves with the holiday pay provisions. To assist with this, we outlined the key aspects and tips for preparing for the changes in our article and the Government has published guidance on the changes.
2. Check that you are already correctly factoring the appropriate payments into your holiday pay calculations (e.g., to include commission, regular overtime, and shift allowances).
3. Check that your WTR record keeping complies with the legislative requirements.
4. Contract policies and procedures may need to be updated to provide for the changes. You may need to factor in time to consult about contractual changes.

The increase to the Immigration Health Surcharge (IHS) has been delayed and will now come into force on 6 February 2024. The revised annual cost will be as below:

• Children, students and Youth Mobility Scheme applicants: £776 (up from £470)
• Adults: £1,035 (up from £624)

The fee uplifts are substantial. In adults, this represents a 66% increase on the previous annual cost and will have an impact on employees who are funding immigration applications themselves and/or employers who are reimbursing all (or some) of this cost for their workers.

Action points:

1. Applications submitted prior to the implementation date will not be subject to the higher charges. Therefore, submitting applications prior to the implementation date where possible will save on these increased costs.
2. Ensure these increased costs are factored into your budgets for 2024.

Planned increases to the civil penalties for employers who employ illegal workers have been delayed and will come into force on 13 February 2024. The civil penalty fines will triple, rising to £45,000 per worker (if there are no previous breaches in the last 3 years) and £60,000 per worker for repeated breaches.

Action points:

1. Review existing right to work policies and ensure HR and recruitment teams are adequately trained to ensure compliance to avoid incurring fines.
2. The Government’s draft updated code of practice on preventing illegal working sets out the actions employers can take to avoid liability for a civil penalty. This code of practice comes into force from 13 February 2024.

From 1 April 2024 the National Living Wage (NLW) will increase to £11.44 for workers in the UK. In addition, the NLW will now be applicable for workers aged 21 and over (where previously it was only applicable to those aged 23 years and over).

The National Minimum Wage (NMW) will also be increased for younger workers as below:

• 18 – 20: £8.60
• 16 – 17 and apprentices: £6.40

Furthermore, the National Minimum Wage (Amendment) (No 2) Regulations 2023 remove an exemption to the NMW which enables domestic workers who live in their employer’s homes to be paid less than the NMW. The regulations come into force on 1 April 2024.

Action points:

• Employers should conduct a review of the pay of their workers, including live-in domestic workers, in anticipation of the changes and put measures in place to ensure that workers are being paid the applicable rates when they come into force.

The Flexible Working (Amendment) Regulations 2023 are due to come into force 6 April 2024. The Regulations remove the requirement for an employee to have 26 weeks’ service in order to be able to make a request for flexible working. The right to request flexible working will become a “day one” right.

In addition, the Employment Relations (Flexible Working) Act 2023 is expected to come into force in July 2024. This new legislation will make changes to employees’ rights to request flexible working, so that:

• There will no longer be a requirement for employees to support their request by outlining the effect it will have on the employer, and how the effect can be dealt with.
• Employees can make two flexible working requests in any 12-month period (instead of one).
• Employers will no longer be able to reject requests without consulting and exploring options with the relevant employee.
• Employers will be required to respond to an employee’s flexible working request within two months (instead of three). However, the employer and employee can agree to a longer decision period if required.

Action points:

1. Policies and procedures will need to be updated to reflect the changes.
2. Be prepared to deal with flexible working requests from employees, from day one of their employment.
3. Plan for the tighter timeframe to respond to flexible working requests, and to be aware that you might see an increased number of requests.
4. Keep an eye out for the final version of the Acas Code of Practice on requests for flexible working, which will reflect the changes. A draft has been published here. It emphasises approaching flexible working requests positively.

The draft Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 propose to extend the period of special protection from redundancy for employees who are on maternity leave, adoption leave or shared parental leave. At present, those parents on such leave should be offered priority right of any suitable alternative employment available in a redundancy situation.

The draft regulations propose to extend the period of protection, such that:

• For maternity leave, the protected period would run from pregnancy through to 18 months from the first day of the expected week of childbirth (or 18 months from actual date of birth where the employee gives notice of this date before the end of maternity leave).
• For employees who have suffered a miscarriage before 24 weeks of pregnancy, the protected period would run from pregnancy through to two weeks after the end of pregnancy (after 24 weeks an employee would be entitled to maternity leave).
• For adoption leave, the protected period would run from 18 months from placement for adoption.
• For shared parental leave, the protected period would run from 18 months from birth, subject to the parents having taken a minimum of 6 consecutive weeks shared parental leave and not being protected under pregnancy, maternity, or adoption protection above.

This extended protection would apply to pregnancies that the employer is informed of on, or after 6 April 2024, any maternity or adoption leave ending on, or after 6 April 2024 and any shared parental leave starting on or after 6 April 2024.

Action points:

1. Be aware that these changes are likely to come (in April 2024) in when planning for future restructures and providing training for those who deal with redundancies.
2. There is nothing requiring you to mention the protected period and redundancy in your policies, but you could choose to do so if you wished.
3. Consider whether your HR records will enable you to identify those who are entitled to special protection e.g.
   1. Identifying who has taken 6 weeks or more shared parental leave.
   2. Identifying whether you know the date of birth of a child of a parent who has taken maternity leave.
   3. Identifying expected dates and dates of miscarriage.

The draft Carer’s Leave Regulations 2024 are due to come into effect on 6 April 2024. The regulations make provision for a statutory right to one week’s unpaid leave per year for employees providing or arranging care for a dependant with a long-term care need. There is no minimum service requirement to qualify for this right.

Action points:

1. A new policy will be needed.
2. This new right will also need to be cross referenced in other relevant policies (e.g., time off for dependents). It may be sensible to have emergency time off and carers’ leave referred to in one section together given how closely interrelated they will be.
3. Uptake of this new right is likely to be limited given the leave is unpaid – Carers UK are encouraging employers to consider voluntarily making this right a paid one.

The draft Paternity Leave (Amendment) Regulations 2024 come into force on 8 March 2024. They propose the following changes to paternity leave:

• Fathers (or partners) may choose to take two weeks’ paternity leave as two separate one-week blocks, rather than being limited to taking it in one block.
• Reduction of the period of notice required for specifying the start date of the period of paternity leave and its duration, to 28 days.
• Extension of the period when fathers (or partners) can take paternity leave to any time in the 52 weeks after birth or placement with the adopter.

The regulations are due to apply in respect of children whose expected week of birth, or expected placement for adoption, takes place on or after 6 April 2024.

Action points:

1. Policies and procedures will need to be updated to reflect the changes.
2. Be aware of the reduced notice period as this may tighten the timeframe for employers to organise any cover required whilst an employee takes paternity leave.

The Government has recently announced a five-point plan to cut migration levels and curb abuse of the immigration system. The Government has stated that these new measures will take effect from Spring 2024 and include:

• Increases to the minimum salary for skilled worker visa applications from £26,200 to £38,700.
• An overhaul of the shortage occupation list.
• A review of the graduate visa.
• A new ban on health and care workers bringing family dependants with them to the UK.
• Increases to the minimum threshold maintenance level for family visas.

Action points:

1. Familiarise yourself with the planned changes. To assist with this, we’ve prepared an article outlining the changes as initially announced here. We will be posting further updates as and when they become available to assist you with staying up to date.
2. For now, consider how these planned changes may impact on your ability to source skills from overseas and any measures you may take to mitigate the impact. Please get in touch if you require any advice or guidance on understanding the changes and mitigating the impact.

The Employment (Allocation of Tips) Act 2023 will require employers to:

• Fairly allocate “qualifying” tips to workers.
• Make payment of such tips to workers in full within one month of payment from the customer.
• Make no deductions from such tips other that those required by law. Contractual terms allowing other deductions from tips will be of no effect. Employers will no longer be able to make deductions to reflect card processing charges.
• Have a written policy that sets out how such tips are dealt with and maintain records of such tips and their allocation for three years (where tips are paid on more than an occasional or exceptional basis).The Government has published a consultation on a draft statutory code of practice to support the measures. Employers will be required to have regard to the code when designing and implementing their tipping policies and practices.

The Government’s aim is for the full measures of the Act and the Code to come into force to come into force on 1 July 2024.

Action points:

1. For businesses where part of the business regularly receives tips, you will need a new policy and procedures to ensure that you have adequate measures for calculating the allocation of tips and recording those calculations.
2. Payroll teams will need to be trained on the new requirements and procedures in place to ensure that payment of such tips are made within the one-month timescale.
3. Keep an eye out for Acas’ new Code of Practice on fair and transparent distribution of tips.

The Workers (Predictable Terms and Conditions) Act 2023 is expected to come into force in September 2024. This will provide workers and agency workers whose contracts have unpredictability in terms of the hours, working days or length of engagement (e.g., where fixed term) with a right to request a predictable working pattern. It is expected that workers will qualify for this right on reaching 26 weeks’ service (although workers will only need to show they have worked once each month in the preceding 26 weeks given the nature of the right).

Workers will be able to make two requests within any 12-month period and employers will be required to:

• Deal with such requests in a “reasonable manner”.
• Notify the worker of their decision within one month. (note this is even shorter than the timeframe for handling flexible working requests).
• Only reject the request if it considers that one or more grounds, as stated in the Act, applies. The grounds are the burden of additional costs to the employer, a detrimental effect on the employer’s ability to meet customer demand, and/or insufficiency of work during the periods the worker proposes to work.
• Where you grant the request, offer the new terms and conditions to the worker within two weeks.

Action points:

1. Consider what proportion of your workforce may lack predictability and be entitled to make this request.
2. A new policy and procedures will be needed to deal with predictable working requests.
3. Keep an eye out for Acas’ new Code of Practice on fair and transparent distribution of tips.

The Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force in, or around October 2024. The legislation will:

• Introduce a proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Enable employment tribunals to increase awards against employers by up to 25% where employers are found to have breached the new duty.

It was initially expected that this legislation would include an explicit protection of employees against harassment by third parties in the workplace. However, following some scrutiny of the purpose and effect of the new law it was softened such that no such “third party” harassment liability is directly imposed. Furthermore, it should be noted that employees cannot make standalone claims under the new legislation. Instead, they must link any claim to an existing harassment claim.

Action points:

1. Consider our Retailers Against Harassment Certification.
2. Review your policies on harassment (generally) and sexual harassment, how active your training is and whether you have good records on how you handle concerns about sexual harassment.
3. Although the provisions on third party harassment were excluded from the bill, do also consider a policy on third party harassment that can be used as a guidance tool by managers and employees.

The Neonatal Care (Leave and Pay) Act 2023 has made provision for a new right for parents whose babies spend time in neonatal care units:

• Statutory neonatal care leave will apply for a period of up to 12 weeks (with a minimum entitlement of one week), dependent on the length of the child’s requirement for neonatal care. The new right to neonatal leave will be a “day one” right.
• Neonatal care pay will be set at statutory rates. A qualifying service period of 26 weeks will apply for parents seeking neonatal care pay.

The specific rules relating to neonatal care and pay are due to be clarified in future statutory instruments, with the new neonatal leave and pay entitlements expected to be delivered in April 2025.

Action points:

1. A new policy will be needed covering the rules relating to this new leave and pay when they are clarified.
2. This new right will also need to be cross referenced in other relevant family-leave policies.
3. Consider whether you will enhance pay for leave of this kind.

The Pensions (Extension of Automatic Enrolment) Act 2023 makes provision for the Government to decrease the age and lower the qualifying earnings threshold for pensions automatic enrolment. It is anticipated that this will reduce the minimum age from 22 to 18 years and lower the qualifying earning threshold to the first pound earned. However, further regulations are awaited to clarify the changes, and a date for implementation is awaited.

Action points:

1. Keep an eye out for the Department for Work and Pensions’ consultation on implementing the new measures, which will inform the detail of the changes.
2. Once implemented, policies and procedures will need to be updated to reflect the changes.

In May 2023 the Government confirmed plans to limit non-compete clauses (which seek to prevent an employee working in competition with the business for a period of time after they have left), to 3 months. However, the Government has not confirmed when this intended legislation will be drafted or come into effect.

Action points:

1. Although the timescale for these changes is unclear, it is sensible to look now at your current restrictive covenants and notice/garden leave clauses so that you are ready for when this change does come into effect.
2. There is no detail yet on what the impact would be on existing longer non-compete clauses in contracts, but it would be sensible to ensure (particularly in new contracts for new staff or promotions) that your non-solicit and non-dealing clauses may provide sufficient cover should any non-compete over 3 months later become unenforceable.

The Strikes (Minimum Service Levels) Act 2023 came into force on 20 July 2023, enabling the Government to make regulations providing for minimum service levels (MSLs) during an employee strike in “relevant services”. MSLs have since been introduced in respect of passenger railway services, and NHS ambulance and patient transport services.

Similar regulations came into force for border security services from 12 December 2023. However, MSLs have not yet been set in the following MSLs are sectors, pending the outcome of the respective consultations:

• Fire and rescue services
• Urgent, emergency and time-critical hospital-based health services
• Education

Action points:

For employers operating in sectors where MSLs are still pending, for the time being:

1. Keep up to date with the latest developments.
2. Familiarise yourself with the procedure to be followed, in the event of a union giving you notice of a strike which relates to a relevant service to which the MSL regulations apply. Government guidance can be found on its website.
3. Where MSLs are introduced, policies and procedures will need to be updated to reflect the new provisions and training will need to be provided to employees handling trade union notices of strike action, considering whether MSLs are met and/or issuing employer work notices.

If you require any advice or guidance on the upcoming legislative changes, please contact our team on the details below.