Employment in the spotlight
Employment regulations have been overhauled in a variety of ways over the past year, with implications for most businesses and employees.
Pensions and payslips
From April 2019 the minimum contribution to auto-enrolment pension schemes increased to 8% of qualifying employee earnings, of which the employer must pay at least 3%. There are no plans for rate increases but employers and employees may choose to pay more. Alternatively employees may opt out and make other provision.
The right to receive a payslip was extended to anyone recognised as a ‘worker’ from April 2019. A worker is broadly anyone who has a contract or arrangement to carry out work or provides services for a reward. Workers have certain employment rights, but not to the same extent as employees.
As well as showing earnings and all deductions, a payslip must now include the number of hours the employee or worker worked, if their pay varies according to the time they worked. Employers also have to keep ‘adequate records’ to show whether they are complying with the time limits on weekly working and night working. A recent decision of the European Court of Justice could result in a tightening of UK law on recording working hours, although Brexit timing now makes this unlikely.
Another consequence of Brexit is that EU nationals will lose their existing right to reside in the UK. Currently most citizens of the EU, as well as Iceland, Liechtenstein, Norway and Switzerland, do not need any permit to remain in the UK. Employers must ensure that employees who are not UK or Irish citizens do have the right to work in the UK if they will still be in post after June 2021.
Most EU nationals will have to obtain settled status to continue living and working here from 2021. This will normally be granted to people who have been living in the UK for five years. Those with less than five years will receive pre-settled status. Applications to the EU Settlement Scheme are already open and the deadline for applying is 30 June 2021 if the UK leaves with a deal, and 31 December 2020 if there is no deal.
A consultation into the use of confidentiality clauses in the workplace has recently closed. Also known as non-disclosure agreements or NDAs, these provisions have long been used to prohibit departing employees from disclosing information. More recently, however, they have also been used to prevent victims of workplace harassment or discrimination from speaking out. The use of NDAs may be restricted in future.
Listed companies with more than 250 employees will be required to publish their executive pay gap – the difference between the amount paid to their CEO and average employee pay. Although the first reports will not be due until 2020, companies should ensure now that they are collecting the necessary data throughout the year. Employers with at least 250 employees in both the public and private sectors have been reporting their gender pay gap to government since 2017 and publishing the information on their websites.
Employers who fail to comply with any of these requirements could face heavy penalties and costs, so it is important to keep up to date.