Employment laws are constantly changing. Here‘s what to look out for in employment law in 2019.
Auto-enrolment contributions:
It’s expected that from April, the minimum contributions for auto-enrolment pension schemes will increase for both employers and their employees. Currently, automatic enrolment requirements require employers to contribute at least 2% of an eligible worker’s pre-taxed salary to their pension purse, while the worker contributes 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively to this pension purse.
1. Executive pay gap reporting:
Rules that started applying on 1 January 2019 require that UK companies with more than 250 employees will have to report on the pay gap between the CEO and employees’ pay and benefits.
This requirement applies to financial years beginning on or after 1 January 2019 so the first tranche of reporting will actually start in 2020. However, affected companies should be calculating the necessary figures throughout 2019 to show the pay gap between the total amount paid to their CEO and the average pay paid an employee so they can be well prepared in advance.
2. Gender pay gap report
Companies with more than 250 employees will be required to report their percentage pay gap annually within 12 months prior to that date, on either 31st March or 5th April depending on the sector in which they operate (March for those in the public sector and April for those in the private or voluntary sector).
This report which would be the second must be published by organisations on their website as well as on the government website. For organisations in the private and voluntary sectors, these reports must also be accompanied by a written statement confirming their accuracy and must be signed by a senior person as prescribed by the legislation. Although employers will be reporting this for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any gender discrimination showing in form of pay differences have been successful. This report aims to scrutinise those companies who have made no effort to address gender pay gaps in the last 12 months since the initial report was given.
While there is no obligation on employers to provide a narrative around any gender pay gap they may have, they should bear in mind that an explanation may help to limit any reputational damage, especially if sexual discrimination is found to be involved. Given that comparisons would likely be made with the previous year’s report, organisations consider highlighting any reduction in the gap and/or be able to provide good reasons for any increases in the gap.
3. Increase of National Minimum Wage and National Living Wage
Having been announced as part of the 2018 Budget, both the National Living Wage (NLW) and National Minimum Wage (NMW) rates were set to increase in April 2019. Under the new NLW, the minimum hourly rate that workers aged 25 years and over are entitled to will increase from £7.83 to £8.21. At the same time, the NMW rate for workers aged between 21 and 24 years will increase from £7.38 to £7.70 an hour. The rate for 18-20-year-olds will increase from £5.90 to £6.15 an hour and those who are over compulsory school age but not yet 18 years will experience an hourly increase from £4.20 to £4.35. The minimum hourly rate for apprentices will also increase from £3.70 to £3.90, providing the apprentice is under the age of 19, or 19 and over still in the first year of their current apprenticeship.
4. Introduction of parental bereavement leave and pay
The government plans to introduce parental bereavement leave and pay for employees in 2019. This proposal would give bereaved parents the right to take paid time off work following the death of their child(ren). Bereaved parents will be given 56 weeks from their child’s death to take bereavement leave. They can take this leave in any of three different forms: a single two-week period, as two separate periods of one week each, or as a single week.
The new right is expected to come into force in April 2020, but employers should start preparing for it in 2019 and could decide to introduce their own bereavement leave policy in their workplace if they don’t already have one.
5. Post-Brexit Immigration Rule Changes
In anticipation of Brexit, the UK government has introduced a settlement agreements scheme under which EU workers already in the UK will be able to apply for “settled status” in 2019, to be able to live and work in the UK indefinitely. Going forward, however, the employment of workers from the EU is likely to be subject to restrictions in the same way as the employment of other foreign nationals. Employers will thus have to review their recruitment and retention policies for effective workforce planning.
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