April is the cruellest month

As we’ve mentioned, the coming weeks will be busy as employers gear up for more changes than usual come the new tax year. Read on for the key ones:

  • Day 1 rights to written statements of particulars

Gone will be the days when employers had two months following an employee’s start date to provide the statement of terms of employment.   From 6 April 2020 most of the information must be provided in a single document by the start of employment and employers must provide a written statement of employment particulars to all workers, not just to employees. The information that must be provided in the statement will be expanded to include extra information on variable working hours, paid leave other than sick pay, benefits, probationary periods and training.

  • Holiday pay for workers with irregular hours

In a development which many will welcome, as part of the government’s Good Work Plan, the reference period for calculating holiday pay for workers who do not work regular hours will increase from 12 to 52 weeks on 6 April 2020. The rationale for this change is to prevent workers missing out on holiday pay if they take their annual leave in the 12 weeks after a quiet period. Employers will now need to pay workers without normal hours their average weekly pay, calculated over the previous year, rather than the previous 12 weeks.

No doubt there will be many more developments on the perennial question of calculations of holiday pay in the coming months and we’ll keep you posted, as ever.

  • Parental bereavement leave and pay

The right to parental bereavement leave and pay is due to come into force in April 2020. The right will allow parents of a child under the age of 18 who has died to take two weeks’ leave. It will be available to the birth parents or those with parental responsibility for the child and can be taken within 56 weeks of the child’s death, in a block of two weeks, or two blocks of one week.

Employees will be entitled to parental bereavement leave from day one of their employment, but there will be a qualifying period of 26 weeks for entitlement to parental bereavement pay.

The regulations have now been published, setting out eligibility for the leave and statutory pay, as well as the rather detailed notice provisions which will apply.

  • Executive pay ratio report

The first reports on executive pay ratio for businesses with more than 250 employees will be due to be published this year, for data covering the 2019/2020 financial year. The legislation requiring employers to report on the pay ratio between their CEO and their employees.

Companies covered by the legislation which came into effect on 1 January 2019 must now include a table in their directors’ remuneration report setting out the ratio between their CEO’s total remuneration and the pay and benefits of employees. The legislation sets out supporting information which must also be provided and there will be news later this year on the extent to which businesses are complying with the new requirements.

  • IR35 in the private sector – now is the time to review your contracts

The IR35 rules and reforms to “off-payroll working” are due to be rolled out to medium and large private-sector employers in April 2020. Responsibility for determining the status of a contractor for tax purposes will effectively shift to the employer, as will liability for deducting tax and national insurance.

Although the Government announced in January that it would carry out a review of the implementation of the changes to IR35, there is unlikely to be any delay to the implementation date the Government confirmed that the new rules are still due to come into force on 6 April 2020. Private-sector employers who will fall within the scope of the new rules are therefore well-advised to continue with preparations.

If you would like further advice tailored to your particular circumstances, please give us a call.