Employment Key Changes 2023: What is coming?
The year ahead see's changes to rates of pay, major reforms to EU law and details on the much-awaited Employment Bill.
1. Increased Rate Changes
The new year welcomed various rate changes. Here is what you can expect:
- National Minimum Wage / National Living Wage rates are set to increase from 1st April 2023.
| 23 years or older | Increase from £9.50 per hour to £10.42 per hour |
| 21 – 22 years old | Increase from £9.18 to £10.18 per hour |
| 18 – 20 years old | Increase from £6.83 to £7.49 per hour |
| 16 – 17 years old and apprenticeships | Increase from £4.81 to £5.28 per hour |
- Statutory maternity, adoption, paternity, shared parental pay. The rate of £156.66 per week will increase to £172.48 per week on 2nd April 2023.
- Statutory sick pay. The rate of £99.35 is set to increase to £109.40 per week. This increase is expected to occur on 6 April 2023.
2. Retained EU law (Revocation and Reform) Bill
The Retained EU Law Bill will repeal all EU law unless new legislation keeps it in place. The introduction of the Bill could see changes to:
- Transfer of Undertakings (Protection of Employment) Regulations
- The Working Time Regulations
- The Agency Workers Regulations
- Fixed-term Employees Regulations
- Part-Time Workers Regulations
- The Information and Consultation of Employees Regulations
- Various health and safety regulations
- Maternity and Parental Leave Regulations
3. Employment Bill
The much-awaited Employment Bill, mentioned in 2019, is likely to come in to force in 2023. The Employment Bill is said to include some of the following:
- Changes to the existing right to request flexible working. Employees no longer need 26 weeks of service to request flexible working; they can do so right away.
- Proposals to provide job security for new and expectant mothers for up to 6 months after their maternity leave ends.
- Introducing the right to receive up to 12 weeks’ paid neonatal leave for parents of babies needing neonatal care.
- Providing employees who are carers the day one right to receive one week’s unpaid leave per year.
- Allowing workers on variable hours the right to request a more predictable and stable work contract after 26 weeks’ qualifying service.
- Proposals making it unlawful for employers to withhold tips, gratuities and service charges from workers.
- Imposing a new duty on employers to prevent sexual harassment at work (extending to third parties). There are also proposals to extend the time limit for claims to 6 months.
Also in 2023, the Harbours (Seafarers’ Remuneration) Bill will come into effect, giving UK ports authority to deny access to ships that pay their crew members below the national minimum wage.
The Transport Strikes (Minimum Service Levels) Bill will likely take effect in 2023. It requires employers and unions to agree on a minimum service level during transport strikes for three months. It will also remove the automatic unfair dismissal protection available to employees who participate in strike action during that period.
April 2022 Employment Law Changes
There are several changes in employment law taking place in April. Read our blog for a summary of the key changes.
Minimum Wage
From 1 April 2022, the national minimum wage increased. The new rates are:
- National living wage (23+): £9.50 per hour
- Adult rate (21-22): £9.18 per hour
- Development rate (18-20): £6.83 per hour
- Youth rate (16-17): £4.81 per hour
- Apprentice rate (under 19 or in the first year): £4.81 per hour
- Accommodation offset: £8.70 per day
Employers will need to ensure they are paying in line with these new rates from April 1st going forward.
Statutory Payments
Statutory payments also rose in April. Statutory sick pay increased to £99.35 per week from April 6th, 2022, and statutory maternity, paternity, adoption, shared parental, and parental bereavement pay all went up to £156.66 per week with effect from the 3rd of April 2022.
Covid-19
From the 1st of April 2022, new public health guidance was provided. Anyone with a positive Covid-19 test result is advised to try to stay at home and avoid contact with other people for five days after the day they took the test. Anyone with symptoms is advised to try to stay at home and avoid contact with others until they stop displaying symptoms.
Free tests were withdrawn from April 1st and instead, lateral flow tests can be bought from retailers for around £2 per test.
Most employers will no longer have to consider COVID-19 in their risk assessments from April 1st.
PPE to be provided to workers
From the 6th of April 2022, the Personal Protective Equipment at Work (Amendment) Regulations 2022 came into force and amended the 1992 Regulations. Under the new rules, employers will be required to provide suitable free personal protective equipment to workers as well as employees where there is a health and safety risk. If PPE is required, employers must ensure their workers have sufficient information, instruction, and training on the use of PPE.
April looks like to be a busy month with plenty of changes and things to be aware of for employers.
Related Articles:
Living with Covid-19: The Latest News for Employers
Proposed Family Leave Changes for 2022
Minimum Wage Rates Increase from 1st April 2020
It has been announced that on the 1st April 2020 the minimum wage will increase by amounts ranging from 4.6% to 6.5%. The National Minimum Wage (NMW) is the minimum pay per hour that most employees are entitled to by law. An employee's age and if they are an apprentice will determine the rate they will receive.
These rates were recommended to the government by the Low Pay Commission, an independent body that advise on the national minimum wage and living wage. It is estimated that approximately three million workers will see pay increases due to the new rates being introduced. Employees aged 25 and over will see a rise of 51p from £8.21 to £8.72, which will result in an increase of £930 annually.
Please see the current rates and the new rates below:
| Rates from 1 April 2019 are | Rates from 1 April 2020 will be | |
| 25 yrs old and over | £8.21 per hour | £8.72 per hour |
| 21-24 yrs old | £7.70 per hour | £8.20 per hour |
| 18-20 yrs old | £6.15 per hour | £6.45 per hour |
| 16-17 yrs old | £4.35 per hour | £4.55 per hour |
| Apprentices under 19 or 19 or over who are in the first year of apprenticeship |
£3.90 per hour | £4.15 per hour |
It has also been recommended by the Low Pay Commission that the national living wage will be paid to employees aged 21 and over. The National Living Wage is an obligatory minimum wage currently paid to employees aged 25 and over that was introduced in April 2016. The government aims to achieve this recommendation by 2024.
Christmas Bank Holiday Entitlements
There are three public holidays coming over the festive season – Christmas Day, Boxing Day and New Year’s Day. Although many offices across the country will close during this period it can be one of the busiest times of the year for industries including retail, hospitality, and hair and beauty. So what public holiday entitlement are employees entitled to over this time?
Bank holiday entitlement
Employers do not have to give employees paid leave on bank holidays. Any right to time off, payment for time off or extra pay for bank holidays worked depends on the terms of the employee's contract of employment. Therefore employees may be required to work on bank holidays. Employers may choose to include bank holidays as part of a worker’s statutory annual leave.
Holiday leave entitlement
Employees’ holiday rights start on the first day of their employment.
Under the Working Time Regulations 1998, workers (including most agency and freelance workers) have the right to:
• 5.6 Weeks’ paid leave each year, this equates to 28 days for full-time employees
Part-time employees
Part-time employees are entitled to the same holidays as full-time workers, calculated on a pro-rata basis. For example:
• 5.6 x 5 working days = 28 days
• 5.6 x 4 working days = 22.4 days
• 5.6 x 3 working days = 16.8 days
Irregular hours
Annual leave for irregular workers is best calculated as a percentage using 12.07% of days worked.
Limits on statutory leave
Statutory leave is capped at 28 days per year. If an employee works 6 days per week their statutory entitlement is 28 days, not 33.6 (6 multiply by 5.6)
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National Minimum Wage (NMW) in the news again
A junior minister has revealed that shortfalls in national minimum wage (NMW) payments hit a record £10.9m in 2016, affecting up to 100,000 employees.
Some of the country’s well-known retailers were caught out by failing to pay staff correct wage rates, including John Lewis & Tesco. Tesco stated that it had paid their staff less than the NMW when a new payroll system was introduced, leaving 140,000 of its employee’s being short-changed nearly £10m between them. John Lewis also blamed a payroll error when it was discovered they had breached the NMW laws to the tune of £36m.
Charles Cotton, performance and reward advisor at the CIPD said there were various reasons for shortfalls in payments from employers – “…employers may be ignoring the law and exploiting their workers…another is that the employer doesn’t fully understand the legal requirements…so it is important that employers are aware of the rules.”
This is not the first time NMW underpayments have been brought to light this year, we recently posted a blog on the government's name and shame scheme where 233 employers had to pay back £2m to underpaid workers. And also the release of a recent survey by the Dept. for Business, Energy and Industrial Strategy (BEIS) indicated that 1 in 5 apprentices have not been receiving the mandatory minimum wage. The survey discovered that the number of apprentices receiving less than the NMW they are entitled to rose sharply from 13% for those aged 16-18 to 32% for those aged 19-20.
Underpayments occurring since April 2016 have been subject to a penalty of 200% of the value of the underpaid amount – capped at £20,000 but this does not seem to have had the desired effect of discouraging employers from breaching the rules.
It is extremely important that organisations pay the wage rates that they are legally obliged to. Employers that are found to be deliberately flouting the law should also be prosecuted, so that good companies aren’t undermined by bad ones.
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233 employers to pay back £2 million to underpaid workers
233 employers have been ordered to pay back almost £2 million to 13,000 of the UK’s lowest paid workers, as part of the Government’s scheme to name and shame employers who fail to pay the National Minimum Wage and Living Wage.
A list that identifies these employers has been published by The Department for Business, Energy and Industrial Strategy. As well as paying back the money owed, employers on the list have also been fined £1.9 million by the Government.
The sectors that featured frequently on the list included:
• Hair and Beauty: approximately 60 employers, in arrears of £121,000 for circa 200 workers
• Hospitality: approximately 50 employers, in arrears of £77,000 for circa 220 workers
• Retail: approximately 20 employers, in arrears of £1.5m for circa 12,200 workers
Employers in this round fell short by failing to pay workers overtime hours, deducting money from wages to pay for uniforms and wrongfully paying apprentice rates to workers.
Business Minister Margot James said:
“It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers. Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.”
This is the 12th round of Government naming and shaming with so far £6 million recovered for 40,000 workers with 1,200 employers being fined £4 million. Employers need to be aware of the National Minimum and National Wage and Apprentice rates. Employers who fail to comply with these rates could face substantial fines and risk their business being named and shamed. To view the current rates click here.
To view the full list click here.
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Employers must now include voluntary overtime when calculating holiday pay
A landmark legal victory for Unite union means that employers must now include normal voluntary overtime when they are calculating holiday pay. The ruling is of major significance to workers who receive payments for working voluntary overtime but these payments are not reflected in their holiday pay. The union says that the ruling has set a legally binding precedent which employment tribunals across the UK are obliged to follow.
The Case
The case against Dudley Metropolitan Borough Council was brought by 56 council employees who worked on maintaining Dudley’s housing stock as electricians, carpenters, and plumbers. The employees worked regular voluntary overtime, beyond their fixed contractual hours, including Saturdays and they also elected to go on a standby rota every four weeks, to deal with emergency call-outs and repairs. The loss of earnings from holiday pay underpayments varied between £350 and £1,500 a year depending on each worker and how much voluntary overtime they carried out.
The decision by the employment appeal tribunal is the first to confirm that payments for entirely voluntary duties, such as voluntary overtime, standby, call-out work and travel-time linked to that work, should be included in the calculation of workers holiday pay.
Learning Points for Employers
The area of whether overtime should be included in employees holiday pay is a hot topic. This ruling echoes that of Fulton & Baxter v Bear Scotland Ltd when the ET found that overtime and other payments should have been included in the calculation of holiday pay.
Employers who do not pay employees normal voluntary overtime as part of their holiday pay are urged to reconsider this and make a change otherwise they might see themselves in hot water if a case were brought against them.
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Should holiday pay include overtime and commission?
With the unusually high temperatures we have gotten recently in Britain we can agree that summer is officially here. While that is great news for most, especially for employees packing their bags and getting ready for their summer holidays, it leaves employers with the headache of calculating annual leave entitlements. The areas of whether holiday pay should include commission and overtime have been hot topics of late.
Lock v British Gas Trading Ltd
Mr. Lock claimed that British Gas had calculated his holiday pay incorrectly by not including a commission element. Mr. Lock was employed by British Gas as a sales consultant and receives a basic salary plus commission based on the sales he achieves. During a period of annual leave, Lock saw his income was reduced as he was paid only his basic salary and not commission as he was not making sales during his holiday. The Employment Tribunal found that Mr. Lock’s holiday pay should include an amount to reflect the commission that he would have otherwise earned had he not taken annual leave. They found that by penalizing an employee’s holiday pay might discourage them from taking annual leave for the fact that they would not be able to make sales and earn commission during that period.
Fulton & Baxter v Bear Scotland Ltd
Fulton and Baxter (the claimants) claimed that Bear Scotland Ltd (the respondent) made unauthorized deductions from their wages when overtime and other payments had not been included in the calculation of their annual leave pay. The ET found that by omitting these additional payments from its annual leave calculations, the respondent had indeed made unauthorized deductions from the claimant’s wages.
Learning Points
These recent rulings indicate a new perspective on what is deemed to be fair in relation to the calculation of leave entitlements. In light of these cases, employers across the board are reviewing how they calculate holiday pay. The current position is that, if there is a fundamental link between commission received and the performance of tasks, the commission should be included in the calculation of holiday pay. Therefore, where an employee would have earned commission during the leave period had they worked, it should be included when calculating holiday pay.
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