Employment Law Updates 2020 – Key changes
Posted: Wednesday October 16 2019
By: Banner Jones
Employment Law Updates 2020 – Key changes – We are fast approaching the end of 2019, it’s time for employers to consider what employment law changes may affect their business in the New Year. We’ve looked below at 3 key changes MMB readers should know about.
EMPLOYMENT LAW UPDATES 2020
New reference period rules for calculating holiday pay.
What is it?
From the 6th April 2020 the way holiday pay is calculated for a worker with variable pay will change. Instead of calculating holiday based on the previous 12 weeks worked, employers must use the last 52 weeks worked or the whole period of employment if less than 52 weeks.
To prevent fluctuations in holiday entitlement due to fluctuations in pay especially where the work undertaken is seasonal.
What should employers do next?
- Think about when your holiday year runs and how this will be impacted on when the change is introduced in April 2020. Consider whether it is better to introduce the change at the start of the holiday year if this is in line with the calendar year rather than part way through.
- Ensure HR and payroll systems are updated to deal with the changes and those involved with processing pay and benefits receive up to date training around the changes.
2. Tax treatment of off-payroll labour
What is it?
All public sector authorities and medium and large-sized private sector clients will be responsible for deciding if the IR 35 rules apply. This means that larger private sector businesses will be required to deduct income tax and National Insurance contributions via payroll from fees for services paid to a personal service company (PSC) where the individual performing the services would, ordinarily be regarded as an employee for tax purposes.
What should effected employers do next?
• Review off-payroll labour to see who this affects and start to have the necessary discussions with those who it impacts upon.
• Take legal advice – the changes may impact on other factors such as employment status and further changes may be needed to employment contracts, pay and pension contributions.