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HR and Employment Law in 2020

At the start of the new decade we take a look at the HR and Employment Law issues which businesses need to be aware of in 2020. Your staff are your greatest asset, so ensure you are up to date and avoid any HR and employment law errors in 2020.

IR35
 IR35 is the term used to describe the type of situation when an individual personally performs services for another business through an intermediary (a personal service company), but if the individual provided the services under a direct contract; they would be
regarded for tax purposes as being employed by the business and subject to the PAYE system.

From 6th April 2020, changes to IR35 rules will be implemented for medium and large businesses in the private sector. There’s an exemption for businesses who are ‘small businesses’ which means meeting two or more of the following criteria:

  • Annual turnover is no more than £10.2 million,
  • Balance sheet total is no more than £5.1 million,
  • No more than 50 employees.

Payments made on or after 6 April 2020 the responsibility for accounting for tax and national insurance will shift to the business that pays for the individual’s services.

It is important that businesses carry out a review to determine whether the new rules under IR35 apply to their contractors and review their contracts and pay arrangements. Failure to do so could see businesses paying the tax for individuals.

Holiday Pay
 The current holiday pay reference period is 12 weeks. From 6th April 2020, the holiday pay reference period will increase from 12 weeks to 52 weeks. Employers will be required to look back at the previous 52 weeks where a worker has worked and
received pay, discarding any weeks not worked or where no pay was received, to calculate the average weekly pay.

Holiday Pay calculations can be particularly complicated for part-time or flexible working staff; businesses should ensure that their calculations are correct in order to avoid unpaid wages claims.

Statement of Terms
From 6th April 2020, new employees and workers will have the right to a statement of written particulars from their first day of employment.

Businesses should review their existing statement of terms and employment contracts to ensure that they are available to employees from day one and have a separate written statement of particulars for workers.

Parental Bereavement Leave
 Parental Bereavement Leave is expected to come into force in April 2020. It will provide bereaved parents with the right to two weeks of leave following the loss of child under the age of 18, or a stillbirth after 24 weeks of pregnancy.

Bereaved parents employed with a minimum of 26 weeks’ continuous service will also be entitled to receive statutory parental bereavement pay. Those with less than 26 weeks’ continuous service will be entitled to take two weeks of unpaid leave.

National Minimum Wage
 The National Minimum Wage will increase from April 2020, the new rates are:

  • The National Living Wage for ages 25 and above – £8.72
  • The National Minimum Wage for 21 to 24-year-olds – £8.20
  • For 18 to 20-year-olds – £6.45
  • For under-18s – £4.55
  • For apprentices – £4.15.

Businesses should review their contracts and pay scales to ensure compliance and avoid any potential claims or fines.

If you want to discuss your HR and Employment Law needs in 2020 then contact our Employment Law Department in Shrewsbury on 01743 248148 or email here. Our team are happy to arrange an initial no obligation discussion at your offices or ours. We offer fixed fee options and flexible retainers in order to meet your business needs.

PCB Solicitors LLP is a modern partnership with over 100 years of experience, with offices in Shrewsbury, Telford, Church Stretton, Knighton, Ludlow, and Clun (by appointment only). The firm is forward-looking and offers a range of legal advice for businesses, including commercial property, HR and employment law, debt recovery and dispute resolution.