2020 Employment Law Changes, Including The Coronavirus Job Retention Scheme

The following sets out the important 2020 employment law changes, including the coronavirus job retention scheme.

2020 Employment Law Changes

The 2020 employment law changes include the following:-

• Executive pay gap reporting comes into force from the start of 2020, which requires UK listed companies with more than 250 employees to report the pay gap between their CEO and their “average” UK worker. There is no fixed deadline for a company to report, except that the data must be published during 2020.
• 31st January 2020 - The UK leaves the EU at 11pm UK time on the 31st January 2020.
• 30th March 2020 – deadline for gender pay gap reporting by public sector employers (enforcement suspended on the 24.3.20 due to the coronavirus pandemic)
• 1st April 2020 - Increases in the National Minimum Wage and National Living Wage. The National Living Wage will increase from £8.21 to £8.72 per hour. As for the National Minimum Wage, for workers aged 21-24 inclusive, the rate will increase from £7.70 to £8.20 per hour. For workers aged 18-20 inclusive, the rate will increase from £6.15 to £6.45 per hour. For workers aged 16-17 inclusive, the rate will increase from £4.35 to £4.55 per hour. The apprentice rate will increase from £3.90 to £4.15 per hour. The daily rate for the accommodation offset rises from £7.55 to £8.20
• 4th April 2020 – deadline for gender pay gap reporting for private sector employers, charities, and voluntary organisations (enforcement suspended on 24.3.20 due to coronavirus pandemic)
• 5th April 2020 - Increases in Statutory Maternity Pay, Statutory Paternity Pay, Shared Parental Pay, Adoption Pay, and Maternity Allowance. In relation to Statutory Maternity Pay and Statutory Adaption Pay, those who qualify are entitled to receive it for 39 weeks at a rate of 90% of their gross weekly pay per week, subject to a maximum of £151.20 per week (up from £148.68 per week) after the first 6 weeks. In terms of Statutory Paternity Pay and Shared Parental Pay, those entitled will receive the smaller of £151.20 per week (up from £148.68 per week) or 90 per cent of their average weekly earnings per week
• 6th April 2020 - Statutory sick pay will increase from £94.25 to £95.85 per week
• 6th April 2020 – Statutory Parental Bereavement Pay starts. The Parental Bereavement (Pay and Leave) Act 2018 provides employed parents with 2 weeks paid leave if they lose a child under the age of 18
• 6th April 2020 - The statutory cap on average weekly pay will increase from £525.00 to £538.00. Accordingly, the maximum unfair dismissal basic award will now be £16,140.00 (i.e. 20 x £538.00 x 1.5). Likewise, statutory redundancy pay will also increase, and the maximum is now also £16,140.00 (i.e. 20 weeks x £538.00 x 1.5).
• 6th April 2020 - The maximum amount that can be awarded for the unfair dismissal compensatory award will increase from £86,444.00 to £88,519.00.
• 6th April 2020 - The award for failure to comply with a tribunal order to reinstate or re-engage an employee (26-52 weeks pay maximum capped at £538.00 per week) will increase from £13,650.00 - £27,300.00 to £13,988.00 - £27,976.00.
• 6th April 2020 - The minimum basic award for dismissal on trade union, health & safety, occupational pension scheme trustee, employee representative, and working time grounds will increase from £6,408.00 to £6,562.00
• 6th April 2020 - For the award made where the right to be accompanied is not properly adhered to (up to 2 weeks pay capped at £538.00 per week), the maximum increases from £1,050.00 to £1,076.00
• 6th April 2020 - Where there is a failure to provide a written statement of particulars (between 2-4 weeks pay capped at £538.00 per week), the award increases from £1,050.00 - £2,100.00 to £1,076.00 - £2,152.00
• 6th April 2020 - For the award made for a failure to comply with the flexible working regulations (up to 8 weeks pay capped at £538.00 per week), the maximum increases from £4,200.00 to £4,304.00
• 6th April 2020: The taxation of termination payments: employer class 1A national insurance contributions, as well as tax, will now be payable on that element of a termination payment which exceeds £30,000.00 at 13.8%. This change was originally due to take effect on the 6th April 2018, but the implementation of the NIC Bill was then delayed by a year until the 6th April 2019. It was then delayed again by a further year until the 6th April 2020. Termination payments will remain exempt from employee’s national insurance contributions. This change will also apply to sporting testimonials.
• 6th April 2020: Under the Government’s ‘Good Work’ plan, the ‘Swedish derogation’ rules which enabled businesses to opt out of equal pay requirements will be abolished, the reference period for calculating an average week’s pay for holiday pay purposes will increase from 12 weeks to 52 weeks, and under Part 2 of Employment Rights (Miscellaneous Amendments) Regulations 2019, workers as well as employees will be entitled to a statement of ‘written particulars’. The latter will also become a day one right (as opposed to the current position of within 2 months). These reforms implement recommendations from the 2017 Taylor Review, and are designed to ensure that from day 1, workers are aware of their rights and entitlements.
• 6th April 2020 - under the ICE (Information and Consultation of Employees) Regulations, just 2%, as opposed to formerly 10% of employees (or at least 15 people), are now required in workplaces with 50 employees or more, in order to request a formal agreement to be informed and consulted about workplace matters.
• 31st December 2020 – the transitional period relating to Brexit will finish

Beyond The 2020 Employment Law Changes

The following is a list of changes which will occur beyond the 2020 employment law changes:-

• By April 2021 - The extension of IR35 to medium and large sized businesses in the private sector, a change that has been described as potentially "catastrophic for the economy". These changes were due to come into force by April 2020, but were delayed by both the coronavirus pandemic and growing concerns over the potential impact of the changes. 

Other potential future changes beyond the 2020 employment law changes include:-

• The extension of the right of shared parental leave to grandparents. This change was originally expected to come in to force in 2018, but was placed on hold in May 2018 whilst the Government carries out a review into the policy of shared parental leave
• New legislation has been promised by the Government to ensure that tips left by customers in restaurants are retained by staff in full, and are not either partially or wholly taken off them by their employers.
• To prevent the disgusting and vile practice of the microchipping of employees by employers becoming more common, join our call for the practice to be banned by Government by writing to your MP. Already, many states in the United States of America have forbidden the practice, with Indiana likely to become the 12th state to do so.
• Ethnicity pay gap reporting
• Final implementation of the Public Sector Exit Payment Cap. A recent freedom of information request by The Times newspaper revealed that the continued delay in implementing the cap has meant that thousands of public sector workers have left their jobs with huge individuals payouts of up to £500,000.00.
• New legislation to provide a statutory right to up to 12 weeks paid leave for parents of children who have spent at least a week in neonatal care
• Possible new legislation to require companies with more than 250 employees to publish details relating to their parental leave and pay policies
• The Government is considering creating a duty for employers to consider whether a job can be done flexibly

Coronavirus Job Retention Scheme

In addition to the 2020 employment law changes, the Government has introduced a coronavirus job retention scheme as a result of the coronavirus pandemic. Under the coronavirus job retention scheme, an employee is 'furloughed', which means that whilst the employee is not working, they remain on the company's books to be brought back when required. Moreover, under the scheme, the Government provides the company with a grant under which 80% of furloughed employees’ wages are paid, up to a maximum of £2,500.00 per employee per month. The first grants under the coronavirus job retention scheme were paid at the end of April 2020, and any company regardless of size can access the scheme in relation to employees, including zero hours employees, so long as the employee was on the PAYE payroll on or before the 19th March 2020.

The coronavirus job retention scheme is due to last 4 months with effect from the 1st March 2020.

For further information, you can read the Government's guide here.

Coronavirus: The Self-Employed

As well as the coronavirus job retention scheme, the Government has also set up a self-employment income support scheme under which the self-employed can apply for a taxable grant of 80% of their average monthly profits. The grant is paid out as a single installment covering 3 months of profits, capped at a total of £7,500.00. The Government's guide to this scheme can be found here. The self-employed may also be eligible to apply  apply online for Universal Credit and/or apply for Employment and Support Allowance if they have a disability or health condition which affects how much they can work.