Although Brexit dominates the news, there will be a number of important employment law developments in 2019.
1. Post-Brexit immigration rule changes
Regardless of whether a deal on the UK’s exit from the EU is agreed, the rules around the employment of EU nationals will change sooner or later.
Once the UK leaves the EU, free movement will end, although in practice this is likely to be delayed pending legislation to repeal the current arrangements. Also, it will take time to put in place the practical arrangements necessary to make this possible.
The government has introduced a scheme under which EU workers already in the UK will be able to apply for “settled status”, to be able to live and work in the UK indefinitely.
However, employers need to be aware that, going forward, the employment of workers from the EU is likely to be subject to restrictions in the same way as the employment of other foreign nationals, so will need to adjust their recruitment processes accordingly. Recruitment and retention policies will need to be reviewed for effective workforce planning.
2. Start gathering evidence for executive pay reporting
Rules coming into force on 1 January 2019 mean that UK quoted companies with more than 250 employees will have to report on ratios between the CEO and employees’ pay and benefits.
The requirement applies to financial years beginning on or after 1 January 2019 so the first tranche of reporting will start in 2020. However, affected companies should gather their evidence in good time to be able to calculate their pay ratios by the deadline.
The information will have to be included in the directors’ remuneration report.
3. Extend itemised pay statements to workers
From 6 April 2019, the right to an itemised pay statement will extend to workers, not just employees.
Further, where a member of staff’s pay varies according to time worked, the employer will have to include on the itemised pay statement the total number of hours worked for which variable pay is received.
This can be done either as an aggregate figure or as separate figures for different types of work or different rates of pay.
4. Publish second gender pay gap report
Employers with 250 or more employees on the “snapshot date” ( 31 March in the public sector and 5 April in the private and voluntary sectors) must report on their percentage gender pay gap annually within 12 months of that date.
This means that the deadlines for the second round of reports are 30 March or 4 April 2019. Employers need to gear up to publish their second report, if they have not done so already.
Organisations must publish reports on their website and on the GOV.UK website. In the private and voluntary sectors, reports must also be accompanied by a written statement confirming their accuracy, and be signed by a senior person as prescribed by the legislation.
There is no obligation on employers to provide a narrative around any gender pay gap but they should bear in mind that an explanation may help to limit any reputational damage. Given that comparisons are likely be made with the previous year’s report, consider highlighting any reduction in the gap or be able to provide good reasons for any increases in the gap.
5. Be aware of national minimum wage rate increases
The national living wage is due to increase to £8.21 per hour from 1 April 2019.
Other national minimum wage rates are also due to increase, with hourly rates rising to £7.70 for workers aged at least 21 but under 25, to £6.15 for workers aged at least 18 but under 21 and to £4.35 for workers aged under 18 who are no longer of compulsory school age.
The hourly apprentice rate will increase to £3.90 and the daily accommodation offset will increase to £7.55.
6. Meet increased statutory family and sick pay rates
The weekly amount for statutory family pay rates is expected to increase to £148.68 for 2019/20. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance.
The increase normally occurs on the first Sunday in April, which in 2019 is 7 April.
The weekly rate for statutory sick pay is expected to increase to £94.25 from 6 April 2019.
7. Start preparing for parental bereavement leave and pay
The government has confirmed that it intends to introduce a right for bereaved parents to take paid time off work.
Under the current proposals, bereaved parents will be able to take leave as a single two-week period, as two separate periods of one week each, or as a single week. They will have 56 weeks from their child’s death to take leave.
The new right is expected to come into force in April 2020, but employers should start preparing for it during 2019, and could decide to introduce their own bereavement leave policy if they don’t already have one.
8. Look out for other developments in the pipeline
Employers should keep abreast of other proposed and potential employment law developments, including:
• Reform to intermediaries legislation (IR35) to be extended to the private sector (expected 6 April 2020).
• Changes to employer NIC treatment of termination payments (expected 6 April 2020).
• Requirement to publish family-friendly policies.
• Duty to consider whether roles can be carried out flexibly.
• Ethnicity pay reporting.
• Changes to rehabilitation of offenders periods in Scotland.