With 2 months left of the year, we have taken the opportunity to update our previous article on the upcoming 2023 employment law changes
Whilst the much anticipated Employment Bill is now unlikely to materialise and form part of the 2023 employment law changes, some of the measures that had been expected to be included have already appeared in separate legislation. Others may also yet do so at some future point.
2023 Employment Law Changes: Rate Changes
The 2023 employment law changes will include the usual set of rate changes. Most will take effect in April 2023, and include the following:-
- The National Minimum Wage and National Living Wage: The new rates will be announced in the Autumn Budget, and will come into force on the 1st April 2023. However, unlike the National Living Wage, the Real Living Wage and London Living Wage increase in November each year. However, as we highlighted in an earlier article, the announcement and implementation of this years Real Living Wage and London Living Wage changes was brought forward to the 22nd September 2022 due to the cost of living crisis. The Real Living Wage was increased by £1.00 per hour from £9.90 per hour to £10.90 per hour, an increase of 10.1%. The London Living Wage was increased by 90p per hour from £11.05 per hour to £11.95 per hour.
- Statutory Maternity Pay, Statutory Paternity Pay, Shared Parental Pay, Adoption Pay, Maternity Allowance, and Statutory Parental Bereavement Pay: It is anticipated that the new rates will be announced in around December 2022. They normally come into effect on the first Sunday in April, which in 2023 will be the 2nd April 2023
- Statutory Sick Pay: The new rate is normally announced at the same time as the new rates for family friendly payments (hence, around December 2022), and will come into force on the 6th April 2023
- The statutory cap on a weeks pay for the purposes of calculating the basic award and statutory redundancy pay: The new rate is likely to be announced in March 2023, and will come into effect on the 6th April 2023.
- The Vento Bands: The Presidents of the Employment Tribunals in England & Wales and Scotland are due to conduct the annual re-evaluation of the Vento bands in March 2023, with the changes coming into force on the 6th April 2023
Health And Social Care Levy
In addition to the usual 2023 employment law rate changes that will be taking effect in April 2023, it was originally intended that there would be further changes as regards the Health and Social Care Levy, which came into effect on the 6th April 2022.
When the levy was introduced back in April 2022, it involved a 1.25% increase in national insurance contributions (NICs), with dividend tax rates increasing by the same percentage rate. It was payable by both employers and employees who are subject to Class 1 NICs, and by the self-employed who pay Class 4 NICs.
The levy was ultimately intended to be a new tax, separate from NICs. However, as it takes time for HMRC to set up on their IT systems, the tax was initially raised through an increase in NICs. Nevertheless, once HMRC have updated their IT systems, then the intention was that from the 6th April 2023, the new tax in the form of a 1.25% surcharge, would replace the NICs increase.
Nevertheless, when Liz Truss took over as Prime Minister, the health and social care levy was scrapped, with the 1.25% rise in National Insurance scheduled to be reversed with effect from the 6th November 2022. However, with Liz Truss having now be replaced as Prime Minister by Rishi Sunak, who whilst Chancellor of the Exchequer introduced the Health and Social Care Levy in the first place, will the Health and Social Care Levy now be reinstated? It is something to watch out for
Gender Pay Gap Reporting
At the same time as the 2023 employment law rate changes are taking effect, the usual gender pay gap reporting deadlines need to be met by those organisations with a headcount of 250 or more employees (with small and medium-sized enterprises (SME's), that being businesses with less than 250 employees, being exempt from the reporting requirements). Accordingly, the deadline for public sector employers to report their data will be the 30th March 2023, with a snapshot date of the 31st March 2022. And for private sector employers and voluntary organisations, the deadline will be the 4th April 2023, with a snapshot date of the 5th April 2022.
Nevertheless, on the 2nd October 2022, it was announced that with effect from the 3rd October 2022, the definition of SME's had been extended to businesses with less than 500 employees and that those businesses newly defined as SME's would be released from certain reporting requirements. However, there has been no confirmation from the Government as to whether this change will eventually be applied to gender pay gap reporting, and form part of the 2023 employment law changes
Now that Liz Truss has been replaced as Prime Minister, it is unclear as to what the new Prime Minister's (Rishi Sunak's) intentions are in this area.
Retained EU Law (Revocation and Reform) Bill
The objectives behind this bill are set out here. Whilst the bill seeks to end the legal status of retained EU law by the 31st December 2023 and form part of the 2023 employment law changes, there is scope to extend the time to complete the process to the 23rd June 2026
Beyond The 2023 Employment Law Changes
With an Employment Bill unlikely to form part of the 2023 employment law changes, those proposals which were expected to form part of the Employment Bill may now be the subject to separate legislation. Whilst this legislation is unlikely to produce changes in time to form part of the 2023 employment law changes, they could take effect shortly afterwards.
Private Members Bills
Some MP’s have brought forward Private Members Bills in an attempt to bring elements of the now likely defunct Employment Bill into force. These include the following:-
- Neonatal Care (Leave and Pay) Bill: As we highlighted in a previous article, Stuart McDonald MP introduced a Private Members Bill on the issue of neonatal care leave and pay which attracted cross party support and Government backing. The bill is now likely to become law in 2023, and should come into force sometime in 2024 or 2025
- As we also reported recently, Liberal Democrat MP, Wendy Chamberlain, brought forward a Private Members Bill to try to introduce a statutory right to 1 weeks unpaid carer’s leave. The Bill had its second reading on the 21st October 2022 and received Government backing. The bill is now likely to become law in 2023, and should come into force sometime in 2024 or 2025
- The Employment (Allocation of Tips) Bill is a Private Members Bill which has been sponsored by Virginia Crosbie MP with the objective of creating a new legal obligation on employers to allocate tips, gratuities and service charges to workers without deductions. It has received Government backing and has already had its 2nd Reading, passed through the Committee Stage, and has now reached the Report Stage. The bill is now likely to become law in 2023, and should come into force sometime in 2024 or 2025
- The Employment Relations (Flexible Working) Bill is a Private Members Bill which has been sponsored by Yasmin Qureshi MP with the objective of making the right to request flexible working a day one right (as opposed to the current position of 6 months). The bill had its second reading on the 28th October 2022, and has received Government backing. Hence, the bill is likely to become law in 2023, and should come into force sometime in 2024 or 2025
It will be noted that whilst the above mentioned bills have received Government backing and are now likely to become law, they are unlikely to become law in time to form part of the 2023 employment law changes.
Other Potential Changes
Other potential post 2023 employment law changes include:-
- Ethnicity pay gap reporting
- The extension of the right of shared parental leave to grandparents
- Replacement of the General Data Protection Regulation (GDPR)
