2019 Key Developments

    18 December 2018 | Rianda Markram

    2019 Key Developments

    1. Pension Contributions.  From 6th April 2019, the minimum contributions that employers must pay into their staff’s pension scheme, increases from the current rate of 2% of the employee’s total earnings to 3% of the employee’s total earnings.
     
    2. The National Living Wage, which is the minimum hourly rate that applies to workers aged 25 years and over increases from £7.83 to £8.21 from 1st April 2019.  The National Minimum Wage rates also increase on this date as follows:
     
    from £7.38 to £7.70 for 21-24 year olds
    from £5.90 to £6.15 for 18-20 year olds
    from £4.20 to £4.35 for 16-17 year olds; and
    from £3.70 to £3.90 for apprentices aged under 19 or in the first year of their apprenticeship.
     
    3. UK small businesses are naturally concerned about the implications of Brexit.  The current position is that 29 March 2019 is “Exit Day”. On the Brexit cut-off date, which is currently expected to be 29 March 2019 (unless extended), the UK leaves the EU. Assuming the Withdrawal Agreement is enacted by the UK Parliament, the UK will then enter a transition period which lasts until the end of December 2020.  Freedom of movement will continue during the transition period.  EU citizens who are already resident up until the end of the transition period will be eligible for permanent settled status in the UK once they have been resident in the UK for five years.  Whilst employers may wish to provide support, it is for individuals rather than employers to apply for settled status.  Individuals are also responsible for the cost of the application.  Whilst the impact of Brexit on immigration is potentially high, the impact on employment law is less obvious.  The Government has published technical guidance on worker status, which shall apply in the event of a “no deal” Brexit.  The notice advises that, with some minor exceptions, any changes to employment legislation in the event of a no-deal Brexit will be solely linguistic, simply to reflect the fact that the UK is leaving the EU. The Government has confirmed there will be no change to substantive employment rights of workers in the event of a “no deal” Brexit.
     
    4. Employment status in the “gig economy”.  There have been a number of recent legal rulings finding that individuals who are categorised by businesses as self-employed contractors are, in reality, workers or employees who are entitled to minimum worker benefits, such as the National Minimum Wage, statutory paid holiday and sick pay.  The trend has been for more and more individuals working for businesses, where the work they do is largely controlled by the business but they do not enjoy employee or workers’ rights, to be recognised by the tribunals as workers.  Unfortunately, determining the employment status of individuals is a complex task for businesses.  There have been calls to simply the law in this area.   
     
    In 2016, the Government commissioned an independent report on modern working practices and the employment status of contractors working within the “gig economy”. The Government finished consulting with businesses and other interested parties on this report in June 2018. We are still awaiting the Government’s response to the consultations, which we expect to receive some time in 2019. Some of the changes the Government has proposed introducing includes a new free online tool for determining employment status, similar to HMRC's employment status indicator used for tax purposes and the introduction of a right for all workers, including zero hour workers and agency workers to request guaranteed hours after a certain period of working. 
     
    5. Payslip changes.  As part of the Government’s recommendations in its response to the Taylor Review, two important changes will be introduced from 6 April 2019, which affects pay slip information from that date, as follows:
    Employers must include the total number of hours worked where the pay varies according the hours worked, for example under variable hours or zero hours’ contracts.
    Payslips must be given to ‘workers’ and not just employees.
     
    6. The Parental Bereavement (Leave and Pay) Act is expected to take effect in 2020.  This legislation creates a new right to two weeks’ bereavement leave and pay for employees whose child dies below the age of 18, or whose child is stillborn. 
     
    7. Tribunal fees.  The Supreme Court abolished Employment Tribunal fees in July 2017 but did not rule out the possibility of the Government reintroducing tribunal fees in the future, provided that the reintroduced fees are set at a lower level, including a fee exemption for those that cannot afford to pay a fee.  According to Government figures, since fees were abolished, the number of individual claims has increased by 64%.  In October 2018, the Ministry of Justice indicated that plans for the reintroduction of employment tribunal fees were in development, although there is no date as yet for the reintroduction of fees.  

    This feature was written in collaboration with the lawyers at Markel Law, who regularly comment on SME related matters. You can stay up to date with the latest legal changes on the Markel Law Blog, written in plain English, so that you understand the implications that is has for you as a small business owner.

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