In Brief – April 2020 employment law round-up

Despite the coronavirus pandemic, important updates, changes and decisions continue to happen in the world of employment law. So, as a breath of fresh air, we have summarised for you here the latest employment law updates which are not directly related to coronavirus.

IR35 extension to private sector pushed back to April 2021

The Government has pushed back the date for the IR35 reforms to April 2021 as part of the economic response to the coronavirus. Whilst this is frustrating for many businesses who have spent a significant amount of time and money preparing for the IR35 reforms, which were due to apply from 6 April 2020, by pushing back the date to 2021 the Government is attempting to alleviate pressure on businesses and individuals during this time of uncertainty.

The Chair of the House of Lords Finance Bill Sub-Committee also wrote to the Treasury in late March 2020 outlining significant concerns it has with the off-payroll reform.

This letter asks questions about the success of the same off-payroll reforms in the public sector, the efficacy of HMRC's CEST tool and the fairness of the proposed changes if they result in many consultants being treated as employees for tax purposes but not clearly enjoying the benefit of employment status for wider employment purposes.

It also states plainly that "had the outbreak not occurred, the Sub-Committee would have argued that the reforms should be delayed, and we now urge the Government to postpone the eventual implementation of the new rules until it resolves the difficulties we have identified".

It is therefore possible that the coming year could see a longer delay to the implementation of IR35 in the private sector and/or better guidance from HMRC on it. As a corollary, there may also be some Government moves towards implementing the Taylor Review recommendation that determining employment status must be simpler. 

For more information on the IR35 rules please see our recent article here.

Gender Pay Gap Reporting suspended for 2020

The Government announced on 24 March 2020 that the gender pay gap reporting deadline has been suspended for this year. There will be no expectation on employers to report their data for 2019/2020.

Government guidance on calculating holiday pay

From 6 April 2020, the 'reference period' used to calculate holiday pay increased from 12 weeks to 52 weeks. The changes are designed to ensure that workers who do not have a regular working pattern throughout the year do not have to take their holiday at a quiet time of the year which is when their weekly pay may be lower.

In light of these changes, the Government has published updated guidance for employers which can be found here. 

Parental bereavement leave and pay is now in force

The new statutory right to parental bereavement leave and pay came into force on 6 April 2020.

From 6 April 2020 all employed parents who lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy will have a statutory right to two weeks leave. The two weeks can either be taken together or in two separate blocks of one week each. Employees who have at least 26 weeks' service, and meet the minimum earnings criteria, will be entitled to statutory parental bereavement pay which will be paid at either £151.20 per week or 90% of weekly earnings if this amount is lower. This pay can be recovered from the government in the same way as SMP (meaning small employers can recover more).

National Minimum Wage (Amendment) (No 2) Regulations 2020

On Monday 6 April two sets of amendments to the National Minimum Wage ("NMW") came into force.

The first amendment uprated the NMW in line with the Low Pay Commission Recommendations. The new rates of NMW are as follows:

Secondly, the National Minimum Wage (Amendment) (No 2) Regulations 2020 makes a number of technical amendments to NMW including:

• Allowing employers to change a calculation year for salaried workers in specified circumstances and upon written notice.
• Removing salary premiums (e.g. unsociable pay or bank holiday pay) from the calculation of basic hours or annual salary pay – meaning employers can continue to pay such premiums without falling outside of the definition of salaried hours work.
• Making it clear that where a worker purchases good or services from their employer in order to comply with a requirement imposed on the workers (e.g. in respect of buying uniform) this will not be a reduction to basic pay for NMW purposes so long as the employer reimburses the worker for the purchase or intends to do so.  

Increases to maximum compensation and banding for injury to feelings awards

Compensation limits for certain tribunal awards and other statutory payments increased from 6 April 2020 as follows:

The bands which Tribunals refer to when assessing injury to feelings awards in respect of successful discrimination and whistleblowing claims have also increased as follows (in England, Wales and Scotland) from 6 April 2020:

• Lower band: £900 to £9,000
• Middle band: £9,000 to £27,000
• Upper band: £27,000 to £45,000