Employment law changes in 2018 – and a sneak peek into what’s looming this year for employers and employees

FOR both employers and employees, there was a raft of changes to the world of employment law during 2018.

The main employment law challenges that had the biggest and most far-reaching impact included:

  • Gender pay gap reporting

Gender pay gap reports for certain public authorities and private and voluntary sector employers with at least 250 employees had to publish their reports. This included information regarding differences in pay between men and women under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

  • Payment increases

From April 1 2018, the National Minimum Wage and National Living Wage rates were reviewed and increased for workers and apprentices. From April 6 2018, compensation limits were increased and also family friendly payments, such as statutory paternity and maternity pay and statutory sick pay also rose.

  • Tax payable on PILONs and termination payment

On April 6 2018, the Government sought to ensure that tax due and owing on termination payments and payments in lieu of notice (PILON) would be paid when required.  From this date all PILON payments must be subject to tax and national insurance deductions.  PILON payments will be treated as earnings and will not be subject to a tax exemption.

  • General Data Protection Regulations (GDPR) and the Data Protection Act 2018

Potentially the biggest change of 2018 that caused issues for many employers were changes to the law on how personal data is handled, processed and stored. Whilst the changes seemed onerous and caused disruption to some business, all companies who handle personal data must ensure they are compliant with the new legislation including being transparent in their handling of the data and the rights of the individual.    If they fail to take appropriate steps and/or suffer a data breach this could lead to hefty fines or other penalties under the enforcement of the Information Commissioner’s Office (as per the accountability principal).

  • Consultation on Employment Tribunals

The consultation, carried out by the Law Commission, raised a number of questions about the current Employment Tribunal system.  These include:

  • Time limits for bringing a claim, normally three months, should be extended and a new legal test introduced for tribunals to use when deciding if an extension is justified
  • Whether a respondent (normally the employer) should be able to share liability from a co-respondent
  • Whether breach of contract claims could be heard by the Tribunal prior to the employment ending and whether the current cap on such award be increased from £25,000

The consultation closes in January 2019, which could lead to further reforms in the coming years.

  • Abolition of childcare vouchers

This workplace scheme closed to new applicants on October 4 2018.  Such change is on the back of a new system being implemented of tax-free childcare, entitling families to claim up to £2,000 per child.

  • Good work plan on employment rights

In December 2018, the Government published a payment showing their commitment to ensuring existing employment rights remained strong and fair.   Whilst this is not legislation certain changes will come into effect in 2019 and 2020 (see 2018 employment law preview below).

What to expect in 2019 and 2020?

  • Brexit

On March 29 2019, the UK is set to leave the EU unless agreement is provided to extend this deadline.  This will be a phased departure up until December 31 2020 allowing for free movement of EU citizens to continue until this time.   The impact upon employment law and rights following the departure remains to be seen. However, the European Union (Withdrawal) Act 2018 does provide that UK law which comes from Europe, such as working time regulations, GDPR and TUPE, will continue to apply.

  • Gender pay gap reports

The requirements for certain public authorities and private and voluntary sector employees with at least 250 employees must report regarding differences between pay (including bonuses) between men and women as required under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

  • National minimum wage rate increases

From 1 April 2019, the national living wage is due to increase to £8.21 per hour.  Other national minimum wage rates are also due to increase, with hourly rates rising to £7.70 for workers aged at least 21 but under 25, to £6.15 for workers aged at least 18 but under 21 and to £4.35 for workers aged under 18 who are no longer of compulsory school age.

The hourly apprentice rate will increase to £3.90 and the daily accommodation offset will increase to £7.55.

  • Statutory increase to family and sick pay rates

The weekly amount for statutory family pay rates is expected to increase to £148.68 for 2019/20. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. The weekly rate for statutory sick pay is expected to increase to £94.25 from 6 April 2019.

  • Changes to information contained in pay slips

On April 6 2019, under the Employment Rights Act 1996, important changes to the information contained within pay slips comes into force.  These include:

  • It must contain the total number of hours worked where pay varies according to the hours worked by the individual. This is most relevant under say zero hour contracts
  • A payslip must now be given to workers and is not limited to just employees

  • Termination payments – tax implications

On April 6 2019, it will become law that any part of a termination payment over the sum of £30,000 will be subject to employer National insurance contributions.

  • The Good work plan – changes in 2019 and 2020
    • April 6 2019 – Employment penalties for breaches, there will be an increase on the penalties for employers that repeatedly breach employment law obligations. This will rise to £20,000.
    • April 6 2020 – Agency Workers (Amendment) Regulations 2019 will come into force which will abolish Swedish derogation on paying agency workers between assignments and employers will no longer be entitled to opt out.
    • April 6 2020 – under Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, the period for calculating an average week’s pay (when calculating holiday pay) will be increased from 12 weeks to 52 weeks.
    • April6 2020 – under Part 2 of the Employment Rights (Miscellaneous Amendments) Regulations 2019, the right to a statement of written particulars (the terms of employment) must be provided on day one of employment and will apply to workers as well as employees.
  • Parental Bereavement (Leave and Pay) Act 2018

The right for bereaved parents to take paid time off work is due to come onto force in April 2020. The new proposals will mean that bereaved parents will be able to take leave as either:

  • A single two-week period
  • Two separate periods of one week each, or
  • As a single week.

They will have 56 weeks from their child’s death to take leave. Employers should consider introducing or amending their own bereavement leave policy accordingly.

Should you have any questions or concerns regarding your duties as an employer or your rights as an individual in employment law regarding employment status or any other employment law, please do not hesitate to contact this article’s authors, Chartered Legal Executive Danielle Symington and Trainee Solicitor Lazuna Ullah or other members of our Employment Law team here at Milners to advise and assist on 0113 245 0852 or email us at hello@milnerslaw

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