UK Employment law changes for 2020 post Brexit
Published by Hunter Dunning on 15th December 2019 -
Although many decisions will be made by the UK Government and Parliament after the election is finalised, there will still be changes taking place that have already been confirmed to come in next year.
Here we’ve listed a few changes that we felt would be useful to all employers when looking at your plans for the year ahead.
RIGHTS TO WORK IN THE UK
Post Brexit, many changes will be made, one main one being the rights of EU citizens to work in the UK. There will be no immediate changes and any changes moving forward will be for the parliament and UK Government to decide. The changes that will be made according to Acas are:
- When Brexit takes place, any EU citizens who have lived in the UK for five years or more will remain to have the right to work in the UK indefinitely by applying for ‘settled status’
- For EU citizens who have lived in the UK for less than five years prior to Brexit taking place have the right to work in the UK indefinitely by applying for ‘pre-settled status’. When they have lived in the UK for five years or more they can then change to ‘settled status’
- Any EU citizens that arrive in the UK post Brexit and want to work in the UK will be subject to any rules and agreements that are made between the UK and EU
- Likewise, Norway, Iceland, Liechtenstein and Switzerland have made similar, separate agreements
- EU citizens who have British, Irish or ‘dual’ citizenship have the right to work in the UK indefinitely. The same applies for them if they have indefinite leave to enter or remain in the UK.
IR35 is a set of tax laws which form part of the Finance Act and is formally known as the Intermediaries Legislation. It was originally brought in by the Government in April 2000 to help HMRC tackle what they class as ‘disguised employment’. To sum it up, employees have been working labelled as a ‘contractor’ to avoid or reduce their tax and NI contributions and the Government are now planning to stop this. A small selection of the changes for IR35 in the private sector from April 2020 are as follows:
- End clients will be responsible for determining the employment status of the contracts with a limited company and provide the contractors with a status determination statement
- Small company exemption – The reform will only apply to medium and large sized end clients and not apply to small company end clients
- As of the 6th of April 2020, medium and large end clients will need to decide whether the IR35 rules apply to them and their individual contractor working through their own limited company
- The end client or agency that pays the contractor’s limited company will be responsible for deducting income tax and NICs as well as paying employer NICs to HMRC
- 5% administration allowance will be taken away
Next year we will be sharing further information on IR35 and an in-depth list of what changes will be in place. In the meantime, if you have any questions that we might be able to help with feel free to get in touch.
PARENTAL BEREAVEMENT LEAVE AND PAY
The new Parental Bereavement Leave and Pay Act (Currently Pay Act 18) is expected to come into force in April 2020 and here are some of the changes to be made:
- Parents will have the right to have two weeks leave if they suffer a stillbirth from 24 weeks pregnant
- The parents will have the right to have two weeks leave if they lose a child under the age of 18
- The parents suffering will have the right to claim pay for this period of time providing they meet the elibility criteria.
CHANGES TO WRITTEN STATEMENTS OF EMPLOYMENT PARTICULARS
Come April 6th 2020, there will be some important changes to written statements (Employment Contracts). The changes are:
- Workers and employees must be provided with their written statement before or on the first day of their new job
- On or after 6th April 2020, all employees will be entitled to a written statement of employment particulars
- Additional information will need to be included in written statements such as the hours and days of the week the employee is required to work, entitlements to any paid leave and other benefits, details of probation period and training that will be provided.
CHANGES TO HOLIDAY PAY
As of the 6th of April 2020, the calculation of holiday entitlement will change. The reference period to calculate a ‘week’s pay’ for holiday pay will be extended moving forward from the previous 12 weeks of work to the previous 52.
CHANGES TO ICE REGULATIONS (INFORMATION AND CONSULTATION OF EMPLOYEES)
There will be a reduction in the percentage of employees to make a valid request for an agreement on shared information from the 6th of April 2020, however the requirement that at least 15 employees make the request will stay the same. Currently it is required that at least 10% of the workforce must put in a request and this will reduce to 2%.
Interested in what the future could also bring for the housing market post the general election? See here for more information.
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(1)Acas – https://m.acas.org.uk/lawupdate
(2) www.gov.uk – https://www.gov.uk/government/consultations/off-payroll-working-rules-from-april-2020