UK Employment Law Changes in 2020
We are quickly approaching the end of 2019, and this means it’s that time again for employers to consider the employment law, and important changes which will take effect in 2020. These are some of the new regulations which are taking place next year and it is important for employers to ensure they are prepared.
One of the most important changes to the employment law in 2020, is the IR35 reform. IR35 describes the tax legislation which is used to ensure contractors are paying the right tax. ‘Outside IR35’ refers to those contractors who are working as a genuine business, whereas ‘inside IR35’ describes contractors who are operating out with these rules. For example, a contractor could be paying tax as a business, but in ever other respect, acting as an employee for the company. One of the main ways to distinguish between the two is the ability to substitute, i.e. the contractor is a service, so someone else can work in their place, if they are unable to attend for any reason.
IR35 was previously defined by the contractor themselves, but in 2017, this was changed to the hirer of the contractor i.e. agency. If assessed to be ‘inside IR35’ it means that the contractor will need to pay NI and tax as normal employees, without the additional employee benefits. The changes only affected the public sector but in April 2020, this will also be extended to the private sector. This means private sector employers hiring contractors will be responsible for determining their IR35 status If you are in doubt as to whether this applies to you, there is an IR35 test you can take to better understand where you stand.
Parental Bereavement Leave
In 2020, workers will receive 2 weeks of paid bereavement leave if they have lost a child under the age of 18 or if they suffer a lost pregnancy after the 24th gestational week. Unpaid leave is usually what employers are offering, but this will allow employees to be paid during their leave. It is important to update your policies and procedures to reflect this.
Right to Written Statement
Employment Rights (Miscellaneous Amendments) Regulations 2019 will be extending the right for workers to receive a written statement of their employment particulars. This will be in effect from April 2020.
Taxing Termination Payments
If termination payments are made to employees and these are over £30,000, employers will be required to pay tax on these payments. This new legislation will be in place from 6th April 2020.
Brexit Transitional Period
Assuming a deal is made between the EU and UK, the Brexit transitional period will end on 31st December 2020. This means that all new legislation relating to the employment law must be in place by then. However, at the time of this article, there has been no agreement made and this will be subject to change depending on the outcome.
It is important for employers to be prepared for upcoming employment law changes. If you would like more information on employment law, advice or training on the HR issues which might affect you individually, please book in for a free zoom consultation with me Ramiza Mohammed, experienced employment lawyer and CIPD accredited HR professional now.