As the first working week of 2019 draws to a close and the mountain of emails has been tackled, it is time for employers to start thinking about and preparing for the employment law changes and proposals that lie ahead.
2019 Employment Law Changes
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Executive pay
A variety of new corporate governance measures will begin to take effect in 2019, increasing the reporting requirements for large companies.
With effect from 1 January 2019, UK quoted companies with more than 250 employees are required to report on the ratios between their CEO and employees’ pay and benefits in their annual directors’ remuneration report. Affected employers should begin to gather evidence now in order to be able to calculate their ratios before the deadline for the first round of reports.
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Ethnicity pay gap reporting
Last year, the Government launched a consultation seeking employers’ views on mandatory ethnicity pay gap reporting, the methods of reporting and how to alleviate the challenges of collecting ethnicity pay information. The Government has suggested the following different approaches to reporting:
- One pay gap figure comparing average hourly earnings of ethnic minority employees as a percentage of white employees;
- Several pay gap figures by ethnicity group comparing average hourly earnings of different groups of ethnic minority employees as a percentage of white employees; or
- Pay band or quartile figures showing the proportion of employees from different ethnic groups by £20,000 pay bands or by pay quartiles.
It is expected that employers with more than 250 employees will be subject to the requirement to publish ethnicity pay data to mirror the existing gender pay gap reporting obligations. The consultation closed on 11th January and we await the Government’s report on its findings.
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Right to work
With effect from 28th January 2019, employers will be able to rely solely on the Home Office’s online right to work check as evidence of an individual’s right to work in the UK where a prospective employee has an immigration status that is capable of being checked by the service.
Employers will be required to keep a copy of the online check for at least two years after the individual’s employment ends.
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The ‘B’ word
Employers must be aware that once the UK leaves the EU, 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. The Government has introduced a “settled status” scheme to open from 30th March 2019 and apply during the transition period up to December 2020, under which EU workers already in the UK can apply to live and work in the UK indefinitely.
The Government has published a toolkit to assist employers with this process. Employers who are reliant on EU employees should nevertheless consider their contingency plans to manage the uncertainty post-Brexit and consider what proportion of their workforce may be affected and what measures may need to be taken to take account of the staffing and financial implications Brexit might have.
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Itemised pay statements
In April 2019, new legislation will come into force providing ‘workers’, as well as employees, with the right to an itemised pay statement.
Where a worker is paid on an hourly basis, this must show the total number of hours paid for. Workers will have the right to bring a claim in an Employment Tribunal in the event that their employer is in breach of this requirement.
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Increased financial penalties
With effect from 6 April 2019, the maximum penalty for an aggravated breach of employment law in discrimination cases will increase from £5,000 to £20,000.
Employers should be mindful to avoid conduct that could be seen as deliberately antagonistic or autocratic and consider providing training for those in managerial positions on how to deal with difficult circumstances and avoid aggravating a potential claimant’s injury to feelings.
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Increases to National Minimum Wage
The National Minimum Wage rates are set to increase in April 2019, with hourly rates rising to:
- £3.90 for apprentices;
- £4.35 for workers aged under 18;
- £6.15 for workers aged at least 18 but under 21; and
- £7.70 for workers aged at least 21 but under 25.
The National Living Wage will increase to £8.21 per hour.
Other potential developments to look out for include the potential reintroduction of Employment Tribunal Fees, the extension of shared parental leave and pay to working grandparents and further changes stemming from the Government’s Good Work Plan.
How Nelsons Can Help
For further information or to comment on this article, please contact a member of our Employment Law team on 0800 0241 976 or via our online form.