PAYROLL INSIGHT
● NICs paid by employees and the self-employed – The Review recommended that the National Insurance contributions (NICs) paid by employees and the self-employed should be moved closer to parity, whilst addressing those areas of entitlement where self-employed people lose out. Whilst accepting that the small difference in contributory benefits no longer justify the scale of differences in NICs rates, the government has no plans to revisit this issue. ● SSP reform – The Review suggested that eligibility to statutory sick pay (SSP) should become a day-one right, regardless of income, but that it should be accrued based on length of service in a similar way to holiday pay. This suggestion has formed part of a review of SSP currently being undertaken by the Department for Work and Pensions. ● Premium rate for zero hours – At the time the Plan was issued, the LPC published its advice in response to the Review’s suggestion that zero-hours workers be paid a premium rate to address the issue of one-sided flexibility. However, the LPC didn’t feel this goal was met and instead recommended an alternative package of measures: m a right to switch to a contract which reflects normal hours m a right to reasonable notice of work schedule m compensation for shift cancellation or curtailment without reasonable notice m information to workers. n
real life examples, to support the interpretation of holiday pay rules. This will be accompanied by an updated and improved holiday entitlement calculator and the option of a new holiday pay calculator is being explored. The BEIS has already been in contact with the Institute and our members have contributed examples to be included in this guidance. Fairer enforcement Whilst setting out legislation changes it will bring about to increase workers’ rights, the Plan also includes measures for ensuring these rights are fully realised. ● Agency workers – In line with government’s enhanced approach to enforcement, it will increase state enforcement protections for agency workers where they have pay withheld or unclear deductions made by an umbrella company. ● Penalties and sanctions – The government will legislate to increase the maximum level of penalty that Employment Tribunals can impose in instances of aggravated breach to £20,000. Further to this, it will legislate to create an obligation on tribunals to consider the use of sanctions where employers have lost a previous case on broadly comparable facts. ● Enforcement agency – Although the establishing of the director of labour market enforcement has been an excellent innovation in terms of improving coordination and sharing
intelligence across agencies enforcing employment law, the government think it can go further. It will bring forward proposals in early 2019 for a new, single labour market enforcement agency to better ensure that vulnerable workers are more aware of their rights and have easier access to them and that businesses are supported to comply. Other points In addition to the above, there are other points tucked away at the back of the Plan which may also be of interest. ● Dependent contractor status – The Review suggested that those workers who are eligible for workers’ rights but are not employees should be termed as ‘dependent workers’. Whilst accepting the need to simplify employment status, the government is not adopting this new term. ● Employment Agency Standards Inspectorate – The government intends introducing legislation to expand the remit of the Inspectorate enabling it to investigate complaints involving umbrella companies and to take enforcement action when required. pay (SSP) should become a day-one right... ...eligibility to statutory sick
Legislation Following the publication of the Plan, the government laid several draft statutory instruments which will bring into force some of the announced changes. ● The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 – These regulations (https://bit.ly/2BqnsPy) make the right to a written statement of particulars of employment apply when an individual begins employment (a day-one right). Where a worker has been employed by their employer for at least 52 weeks, the reference period for calculating holiday pay is increased from 12 weeks to 52 weeks. Where a worker has been employed by their employer for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed. The regulations, which come into force on 6 April 2020, extend to England, Wales and Scotland. ● The Agency Workers (Amendment) Regulations 2019 – These regulations (https://bit.ly/2rZJ8hg) abolish the use of the Swedish derogation – the legal loophole which enables some firms to pay agency workers less than permanent staff. They come into force on 6 April 2020, and cover England, Wales and Scotland. ● The Employment Rights (Miscellaneous Amendments) Regulations 2019 – These regulations (https://bit.ly/2Tf0P80), which extend to England, Wales and Scotland, bring the following into force: m increase the maximum level of penalty available from £5,000 to £20,000 for aggravated breach of a worker’s employment rights (from 6 April 2019) m confer the right to a written statement of particulars of employment and associated enforcement provisions upon all workers (from 6 April 2020) m lower the percentage required for a valid employee request for the employer to negotiate an agreement on informing and consulting its employees. The threshold is lowered from 10% to 2% of the total number of employees (from 6 April 2020).
| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 28
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