This is an update to our previous article on the 2024 employment law changes, updated to take account of recent developments, including the launch of a consultation by the Government on its proposal to reintroduce employment tribunal fees.
Employment Law Changes: Rate Changes
The 2024 employment law changes will include the usual set of rate changes. Most will take effect in April 2024, and include the following:-
- The National Minimum Wage and National Living Wage: The new rates were announced on the 21st November 2023, ahead of the Autumn Statement that was delivered the following day, and will come into force on the 1st April 2024. The rates will be as follows: (i) For workers aged 21 and over (i.e. the National Living Wage), the rate will increase by £1.02 per hour (9.8%) from £10.42 per hour to £11.44 per hour. The age threshold for receiving the National Living wage has been reduced from 23 years of age to 21 years of age, with those aged 21-22 years of age benefitting from an increase of £1.26 per hour (12.4%) from £10.18 per hour to £11.44 per hour (ii) For workers aged 18-20 inclusive, the rate will increase by £1.11 per hour (14.8%) from £7.49 per hour to £8.60 per hour (iii) For workers aged 16-17 inclusive, the rate will increase by £1.12 per hour (21.2%) from £5.28 per hour to £6.40 per hour (iv) The apprentice rate will increase by £1.12 per hour (21.2%) from £5.28 per hour to £6.40 per hour (v) The daily rate for the accommodation offset will increase by £0.89 (9.8%) from £9.10 to £9.99. The increases in the Real Living Wage and the London Living Wage were announced on the 24th October 2024, with those employers who are signed up expected to implement the new rates by the 1st May 2024. The Real Living Wage was increased by £1.10 per hour from £10.90 per hour to £12.00 per hour, an increase of 10.09%. The London Living Wage was increased by £1.20 per hour from £11.95 per hour to £13.15 per hour, an increase of 10.04%.
- Statutory Maternity Pay, Statutory Paternity Pay, Shared Parental Pay, Adoption Pay, Maternity Allowance, and Statutory Parental Bereavement Pay: The new rates were announced on the 22nd November 2023. The maximum rate (i.e. the cap) for all of these family friendly payments will increase from £172.48 to £184.03 per week, which means that those eligible will be entitled to the smaller of £184.03 or 90 per cent of their average gross weekly earnings per week. The average gross weekly earnings required to qualify for all of the family friendly payments, except for Maternity Allowance, moreover, will remain at £123.00 or more. With respect to Maternity Allowance, where an employee earns less than £123.00 per week on average, but was employed for 26 of the 66 previous weeks earning at least £30 per week (averaged over any 13 week period during the said 66 weeks), then they will be entitled to the same. Whilst the announcement states that the rate changes will take effect on the 8th April 2024, the changes would normally come into force on the first Sunday of April, which in 2024 will be the 7th April 2024.
- Statutory Sick Pay (SSP): As with family friendly payments, the new rate was announced on the 22nd November 2023. The rate will increase from £109.40 to £116.75 per week. Whilst the announcement states that the rate change will take effect on the 8th April 2024, the change normally comes into force on the 6th April each year.
- The new rate for the statutory cap on a weeks pay for the purposes of calculating the basic award and statutory redundancy pay was announced on the 27th February 2024, and will come into effect on the 6th April 2024. The statutory cap on a weeks pay will increase from £643.00 to £700.00. Hence, the maximum in terms of the basic award and statutory redundancy pay is now £21,000.00 (i.e. 20 x £700.00 x 1.5). The maximum amount that can be awarded for the unfair dismissal compensatory award will also increase from £105,707.00 to £115,115.00 on the 6th April 2024.
- 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 2024, with the changes coming into force on the 6th April 2024.
Gender Pay Gap Reporting
The usual gender pay gap reporting deadlines need to be met by those organisations with a headcount of 250 or more employees. Accordingly, the deadline for public sector employers to report their data will be the 30th March 2024, with a snapshot date of the 31st March 2023. And for private sector employers and voluntary organisations, the deadline will be the 4th April 2024, with a snapshot date of the 5th April 2023.
The Retained EU Law (Revocation and Reform) Act 2023
The Retained EU Law (Revocation and Reform) Act 2023 received Royal Assent on 29 June 2023.
The retained EU laws listed in Schedule 1 of the Act as at the 31st December 2023 ceased to be law at the year end.
Remaining EU legislation (known as “assimilated law” post 31st December 2023) has been retained, but can still be revoked, amended, or replaced.
The Act also altered the guidelines for interpreting retained EU law by eliminating the principle of EU law supremacy and other EU law principles. Consequently, from the beginning of this year, this allows UK courts to deviate from retained EU case law to a greater extent.
Additionally, the Act reduced the significance of retained direct EU legislation, making it simpler to modify and align with domestic legislation in its interpretation and application.
Holiday Pay
With effect from leave years that begin on or after the 1st April 2024, the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 will implement the following holiday pay changes:-
- Holiday pay for workers with irregular hours and those who only work part of the year will be revamped with the implementation of “rolled-up” holiday pay. This means that instead of being paid when taking annual leave, these workers will instead receive an enhancement to their regular pay in respect of annual leave.
- An accrual method of 12.07% of hours worked will be allowed for irregular hours and part-year workers for annual leave entitlement “in the first year of employment and beyond“.
- A new definition of what constitutes “normal remuneration” (i.e. to include payments directly connected to the work that an emplyee is obliged to perform in accordance with their contract of employment (including commission), payments related to seniority, qualifications and length of service, and any payments that the worker has regularly received over the previous year, including overtime). The new definition applied from the 1st January 2024.
- The Government has replicating certain retained EU case law regarding the carry over of holiday entitlement for: (i) those who are on sick leave or on statutory leave, and (ii) where the employer has failed to acknowledge an entitlement to and/or pay for annual leave, provide sufficient opportunities and/or encouragement for leave to be taken, and failed to provide sufficient warnings that leave could be lost if not taken. This took effect from the 1st January 2024
Strike Related Legislation
Strike related legislation forms a major part of the 2024 employment law changes .
The Strikes (Minimum Service Levels) Act 2023 received Royal Assent on the 20th July 2023. It imposes a requirement to provide minimum service levels during a strike within the following sectors: health, transport, and education services, border security, the decommissioning of nuclear installations, and the management of radioactive waste and spent fuel.
The first set of minimum service levels were enacted with effect from the 8th December 2023 for border staff, the ambulance service, and rail workers, with a new statutory code of practice coming into effect at the same time. At least 40% of services, for example, must be maintained within the rail sector. Under the new regulations, employers are required to compile a “work notice” before a strike occurs. This notice will list all the crucial employees who are needed to maintain the minimum service levels. Workers who are included on this list will be prohibited from going on strike, and would risk dismissal if they did so. Furthermore, trade unions that fail to take “reasonable steps” to ensure compliance with the work notice could be held liable for potential damages of up to £1 million.
The second set of minimum service levels have also been set as part of the 2024 employment law changes. Under the Strikes (Minimum Service Levels: Fire and Rescue Services) Regulations 2024, during a strike fire and rescue services will be required to have sufficient personnel and resources to deploy 73% of all fire engines and other vehicles, and to attend all emergencies.
Moreover, on the 16th November 2023, the Government launched a consultation on whether regulation 7 of The Conduct Of Employment Agencies And Employment Businesses Regulations 2003 should be repealed or not. Regulation 7 prohibits employers from hiring agency workers to provide cover for striking workers.
Regulation 7 had been repealed back in July 2022, relying upon the fact that a consultation had been conducted back in 2015 (required to comply with s12 of the Employment Agencies Act 1973).
However, on the 13.7.23, the High Court held in the case of Aslef v Secretary of State for Business and Trade (2023), that the Government could not rely upon the 2015 consultation as “circumstances had changed since 2015 and the secretary of state cannot, therefore, have been sufficiently aware of the views which would have been expressed by the trade unions or the sector more generally had they been consulted in 2022…What would be required, if the government wished to pursue the proposal to revoke regulation 7, would be a public consultation and further consideration by the Secretary of State/Parliament of whether to implement it.”
Hence, the regulations repealing Regulation 7 (i.e. The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022) were quashed with effect from the 10th August 2023. The new consultation closed for responses on the 16th January 2024 and a response is now awaited.
Private Members Bills
A number of Private Members Bills were passed in 2023, having attracted Government support, with the aim of bringing elements of the now likely defunct Employment Bill into force. These Acts will come into effect as part of the 2024 employment law changes and are as follows:-
- The Neonatal Care (Leave and Pay) Act 2023. Where neonatal care is required in hospital for at least 7 days, parents will be entitled to take up to 12 weeks paid leave, in addition to other leave they are entitled to, such as maternity, paternity, and shared parental leave. This will be a day 1 right
- The Carer’s Leave Act 2023. Will provide working carers with 1 week’s unpaid leave per annum. This will come into effect on the 6th April 2024
- The Employment (Allocation of Tips) Act 2023. Provides workers with an entitlement to receive tips, gratuities, and service charges in full without deductions
- The Employment Relations (Flexible Working) Act 2023. Will provide workers with the day 1 right to request flexible working (as opposed to the current position of 6 months). This will come into effect on the 6th April 2024. Acas has published a draft Code of Practice which is subject to parliamentary approval
- The Protection from Redundancy (Pregnancy and Family Leave) Act 2023. Currently, those on maternity leave, adoption leave or shared parental leave get priority over other employees in a redundancy situation under Regulation 10 of the Maternity and Parental Leave Etc Regulations 1999 (MAPLE), in terms of suitable alternative employment. However, under the new Act, the protections afforded by MAPLE would be extended to run from the point at which the employer is notified of the pregnancy, until 18 months after the birth. Similar rules will apply to those who are taking shared parental leave or adopting a child. This will come into effect on the 6th April 2024
- The Workers (Predictable Terms and Conditions) Act 2023. Where workers hours vary in terms of the number of hours employees work and/or when they work, or they are in a fixed term contract of less than a year’s duration, then they will be permitted (up to twice a year) to apply for a more predictable working pattern after 26 weeks of continuous service. An Acas consultation on a draft Code of Practice closed on the 26th January 2024, and Acas is now in the process of reviewing the responses received
- The Worker Protection (Amendment of Equality Act 2010) Act 2023
It is anticipated that all of these Acts will come into force as part of the 2024 employment law changes, but any that do not should come into effect by 2025 at the latest.
Other 2024 Employment Law Changes
Other 2024 employment law changes include the following:-
Reintroduction Of Employment Tribunal Fees
A consultation on reintroducing employment tribunal fees was launched by the Government on the 29th January 2024, proposing a fee of £55.00 to commence proceedings in the employment tribunal or for lodging an EAT appeal. The consultation remains open until the 25th March 2024.
National Insurance Contributions
Following the 2023 Autumn Statement, the National Insurance Contributions (Reduction in Rates) Act 2023 delivered a reduction in Class 1 National Insurance contributions (NIC’s) on earnings between £242.00 and £967.00 per week (£1,048.00 and £4,189.00 per month) from 12% to 10% from the 6th January 2024. However, following, the 2024 Spring Budget, the rate will fall again from 10% to 8% from the 6th April 2024.
Furthermore, with effect from the 6th April 2024:-
- Class 4 NIC’s paid by the self-employed were due to fall from 9% to 8% following the changes made under the National Insurance Contributions (Reduction in Rates) Act 2023, which implemented the changes announced in the 2023 Autumn Statement. However, following the 2024 Spring Budget, the rate will now fall from 9% to 6% instead
- The self-employed will no longer pay Class 2 NIC’s
Working Time Regulations & TUPE
Under the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which took effect from the 1st January 2024:-
- Employers are no longer be required to keep a daily record of hours worked by staff, but will need to maintain “adequate” records to demonstrate compliance with the Working Time Regulations.
- With respect to TUPE transfers which take place on or after 1 July 2024, businesses with less than 50 employees and businesses of any size engaged in a transfer of less than 10 employees will be permitted to consult directly with employees in relation to a TUPE transfer where there are no worker representatives currently in place. Previously, this rule only applied to micro-businesses with less than 10 employees
Paternity Leave Amendment Regulations 2024
The new legislation will allow fathers / partners to split their paternity leave into two blocks of 1 week each during the first year after birth / adoption. Currently, paternity leave must be taken as one continous block of 1-2 weeks during the first 8 weeks after birth / adoption. The notice period has also been reduced from 15 weeks to 4 weeks. The new legislation will come into force on the 8th March 2024 and form part of the 2024 employment law changes, and will apply to births / adoptions where the expected week of birth / adoption falls on or after the 6th April 2024.
National Minimum Wage: Live-In Domestic Worker Exemption Repealed
The exemption under Regulation 57 of the National Minimum Wage Regulations 2015 has meant that live-in domestic workers do not qualify to be paid the National Minimum Wage. With the passing of the National Minimum Wage (Amendment) (No. 2) Regulations 2023 on the 9th January 2024, however, the exemption will be repealed with effect from the 1st April 2024
IR35: ‘Set-Off Mechanism’ To Address Double Taxation
One of the many problems caused by the 2017 and 2021 IR35 changes is that of double taxation in circumstances where there has been an initial incorrect status determination. Only recently, however, in the 2023 Autumn Statement, was it announced that a ‘set-off mechanism’ would be introduced to address this issue by offsetting tax already paid against the tax liability. Following a consultation, the ‘set-off mechanism’ will come into force as part of the 2024 employment law changes on the 6th April 2024.
Side Hustles: Tax
As part of the 2024 employment law changes, new rules came into force on the 1st January 2024 with the aim of clamping down on those that are not paying the required tax on a side hustle (i.e. any type of employment or business venture that a person engages in, in addition to their primary job or source of income) in which they earn in excess of £1,000.00 per annum. The first £1,000.00 (the tax-free trading allowance) is regarded as “casual or miscellaneous” income. Under the new rules, platforms such as Airbnb, Etsy, eBay, and Amazon are now required by law to report users earnings, bank account details, and tax ID to HMRC, which HMRC can then compare with self assessments to check for discrepancies.
Family Visas: Increase In Minimum Salary Requirement
The threshold will initially increase from £18,600.00 to £29,000.00 in Spring 2024, before later increasing to £34,500.00, and then up to £38,700.00. The Home Office states: “In Spring 2024 we will raise the threshold to £29,000, that is the 25th percentile of earnings for jobs at the skill level of RQF3, moving to the 40th percentile (currently £34,500) and finally the 50th percentile (currently £38,700 and the level at which the General Skilled Worker threshold is set).“
Beyond The 2024 Employment Law Changes
The following are additional employment law changes that may potentially be enacted. Some of these however may not be enacted in time to form part of the 2024 employment law changes, but instead of later changes beyond the 2024 employment law changes:-
- “Fire and rehire”. On the 19th February 2024, the Government published its response to the consultation on the issue of the draft statutory code of practice on dismissal and re-engagement (aka 'fire and rehire') which has now been laid before parliament, with a view to it coming into force in summer 2024. Once in force, employment tribunals will have the power to "increase any award it makes by up to 25% if the employer has unreasonably failed to comply with the Code" and vice versa. The draft code had originally been published in January 2023, ahead of the launch of the consultation on the issue.
- Legislation in relation to what the Government describes as the “crack down on misuse of Non-Disclosure Agreements in the workplace“
- Employment Tribunal & EAT Composition: A consultation was launched to determine whether the number of tribunal cases that are heard by a judge alone, as opposed to a panel which includes a judge and non-legal members, can be increased. The aim behind the potential reforms is to reduce the length of hearings. The consultation closed on the 27th April 2023
- In response to its 2020 consultation on non-compete clauses, the Government announced plans on the 10th May 2023 to limit post-termination non-compete clauses to 3 months in terms of duration. The announcement by the Department for Business and Trade states that the aim behind the proposal is to promote “competition and productivity in the workplace.”
- Save As You Earn (SAYE) & Share Incentive Plan (SIP) Consultation: The Government launched the consultation “to consider opportunities to improve and simplify the scheme[s].”
- Umbrella Companies Consultation: The Government launched the consultation with the objective of ensuring that umbrella companies are better defined, provide those working for them with employment rights, and that they are compliant with tax rules
- The Data Protection and Digital Information Bill (replacement of the General Data Protection Regulation (GDPR)). The Bill is currently at the committee stage in the House of Lords
- Legislation following on from the consultation on disability workforce reporting
As stated, some of the above may not be enacted in time to form part of the 2024 employment law changes, but instead of later changes beyond the 2024 employment law changes.
Further 2024 Employment Law Changes May Be Announced
Further employment law changes may yet be announced, and any further proposed employment law changes will be detailed in future updates to this article.
