REWARD
Pay legislative changes
Danny Done, managing director of Portfolio Payroll, provides a recap of recent legal developments which affect employee pay
T his year, payroll has already had several developments to navigate. Not only have there been brand- new laws, but we’ve also seen changes to existing legislation that impact employee pay. As we head towards the latter part of 2024, it’s a good time to reflect on what has happened so far to the laws in Great Britain.
lump sums based on the hours worked in the previous term. In 2022, the Supreme Court found that this was contrary to the Working Time Directive, from which the Working Time Regulations 1998 (WTR) were derived, which didn’t permit holiday for part-year and irregular hours workers to be prorated. “The law was changed in 2024, allowing employers to once again pro rata holiday for part-year
If an organisation’s holiday year is January to December, it will have to wait until January 2025 to bring this in. Employers looking to make these changes will also need to consult with their staff and only move forwards with their consent. If this isn’t given, formal consultation will need to be considered to effect the necessary contractual changes. Leave for carers Since 6 April 2024, employees who have a dependant with a long-term care need have had the right to take time off work to provide care or make care arrangements. An eligible employee can take up to one of their working weeks off per rolling 52-week period. The leave can be taken in multiple blocks or all in one go but the minimum amount of leave to be taken at any one time is half of the employee’s working day. The leave is unpaid, so if an employee takes it, this will need to be factored in when processing their pay.
Covid carry-over ends Due to the impact of the Covid-19
pandemic, the Working Time Regulations 1999 were amended to allow for the carry- over of up to four weeks of leave into the next holiday leave year if it wasn’t reasonably practicable for the employee to take it because of Covid-19. The year kicked off with the removal of this rule on 1 January 2024, although workers had until 31 March 2024 to take any leave that they had carried over because of this amendment. Statutory rate changes Statutory rates and the national minimum wage / national living wage (NLW) are reviewed annually and usually increased. This year was no exception. However, the most significant change was that from 1 April 2024 the NLW was expanded to include those aged 21 and over for the first time. There were changes too for statutory sick pay, which increased on 6 April 2024, and family leave payments like statutory maternity pay and statutory paternity pay, which increased from 7 April 2024. Organisations will have had to identify any employees who these changes impacted and make the necessary amendments to their pay. Irregular hours and part-year workers holiday entitlement The case of Harpur Trust v Brazel involved a zero-hours, term-time only teacher who was paid her holiday entitlement in three
and irregular hours workers
using the 12.07% accrual method”
This meant that those whose contract didn’t require them to work every week of the year were entitled to have the full 5.6 weeks of annual leave under the WTR: this couldn’t be prorated. An extreme example of the effect of this would be an exam invigilator, employed permanently to work for four weeks every year. They would, under the law as interpreted by the Supreme Court, be entitled to 5.6 weeks’ annual leave – which would total more weeks than they actually worked in the year. In recognition of this anomaly, the law was changed in 2024, allowing employers to once again pro rata holiday for part-year and irregular hours workers using the 12.07% accrual method. Changes were also made at the same time to allow, once again, the use of rolled-up holiday pay for irregular hours and part-year workers. However, both these changes can only be implemented for annual leave years that start on or after 1 April 2024.
Tips Hospitality, leisure and service
employers will also be impacted by the implementation of the new tipping laws and Code of Practice, which are both in force from 1 October 2024. It requires employers to fairly allocate qualifying tips, gratuities and service charges to staff, including agency workers. Qualifying tips include both employer-received tips and worker-received tips. Non-monetary tips can also be qualifying tips if they are received or controlled by the employer. This could include a voucher, stamp, token or similar item that has a fixed value which can be expressed in monetary terms or exchanged for money, goods or services. There has certainly been a lot of change to navigate this year already that has impacted payroll and it’s likely that there’s more to come. n
35
| Professional in Payroll, Pensions and Reward |
Issue 104 | October 2024
Made with FlippingBook - Online magazine maker