We’re not even halfway through 2024, and it has already been a landmark year for UK employment law.
The UK Government has made amendments to several policies relating to flexible work, paid and unpaid leave and redundancy, (most of which came into force from April 2024), and there are several others on the horizon for later in the year. With an ‘all change’ stance to 2024, it’s vital that employers understand the changes in legislation and where adjustments need to be made to existing HR policies.
In this comprehensive blog, we provide an overview of the changes to UK employment law for 2024, helping you identify where your business’ HR policies may need to be updated.
- Carer’s Leave
- Employment Relations (Flexible Working Act) 2023
- Protection from Redundancy (Pregnancy and Family Leave) Act 2023
- The Paternity Leave (Amendment) Regulations 2024
- Chapter 8 of Income Tax (Earnings and Pensions) Act
- Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023
- What Else Is On The Horizon?
- Next Steps
1. Carer’s Leave
‘The Carer’s Leave Act 2023’ is an entirely new policy, created off the back of a successful campaign by charity ‘Carers UK’ to introduce a statutory right to leave for employees with long-term care commitments. As of 6th April 2024, employees are entitled to take one week of unpaid leave per year if they have caring obligations to a dependent.
Under the Act, a person is dependent on an employee if:
- They are a spouse, civil partner, child or parent of the employee.
- They live in the same household as the employee (excluding boarders, employees, lodgers or tenants).
- They reasonably rely on the employee to provide or arrange care.
Under the Act, a dependent of an employee has a long-term care need if:
- They have an illness or injury (can be physical or mental) that requires, or is likely to require, care for more than three months.
- They have a disability for the purposes of the Equality Act 2010.
- They need care due to old age.
Under UK employment law, The Carer’s Leave Act is a day one right for all eligible employees, with no qualifying period. However, it is worth noting that although as an employer you can’t deny a request for carer’s leave, you can choose to postpone it if you deem that by approving for the requested time, the operation of the business would be greatly disrupted.
2. Employment Relations (Flexible Working Act) 2023
The Flexible Working Act 2023 introduced on 6th April 2024, is an update to the previous iteration of flexible working rights.
Employees can now make two (previously one) requests for flexible working in a 12-month period, and employers need to respond within two months (previously three).
When making their application, employees no longer need to explain the potential impact of their request on the company. However, as an employer, you are now entitled to explain the reasoning behind any rejection.
The reasons you can use to deny the request remain the same; here’s a reminder:
- Additional costs that will harm the business.
- The work cannot be redistributed among other staff.
- Cannot recruit additional staff to do the work.
- Flexible working will affect quality.
- Flexible working will affect performance.
- The ability to meet customer demand will be impacted.
- There’s a shortage of work at the proposed working times.
- The company is planning changes to the workforce.
Due to a separate piece of updated secondary legislation, The Flexible Working (Amendment) Regulations 2023, employees can now make their requests from their first day of employment, without having to wait 26-weeks (the previous qualifying period).
This change in UK employment law could have implications on your available workforce, so we’d recommend getting on the front-foot and preparing practical solutions and scheduling options for employees to cater for flexible working patterns, whilst ensuring business operations are not affected.
3. Protection from Redundancy (Pregnancy and Family Leave) Act 2023
Updated legislation introduced on 6th April 2024, extends the existing protection from redundancy given to employees on maternity leave, shared parental leave or adoption leave to pregnant employees and those who have recently returned from maternity, adoption or shared parental leave. It is worth noting that the protection offered is in the form of priority for redeployment opportunities, it is not a ban on making an employee redundant.
The levels of protection under the new UK employment law are outlined below.
- Pregnant employee who takes maternity leave: protection begins when the employer is notified of the pregnancy. Protection ends 18 months after the child’s date of birth (or expected week of birth if the employee does not declare DOB to their employer).
- Employee who has suffered a miscarriage: protection begins when the employer has been informed of the pregnancy. Protection ends two weeks after the end of the pregnancy (for pregnancies endings before 24 weeks). Pregnancies ending after 24 weeks are classed as stillbirths and the employee would be entitled to statutory maternity leave.
- Employees taking adoption leave: the protection begins at the start of adoption leave and ends 18 months from the date of placement (or date of entry into Great Britain if an overseas adoption).
- Employee taking shared parental leave: Protection begins at the start of shared parental leave. When protection ends depends on the amount of leave taken. If less than 6 weeks is taken, it ends at the end of the leave. If more than six continuous weeks of leave is taken, protection ends 18 months from the child’s DOB.
Due to the large period of protection, these changes will significantly increase the number of employees with protection from redundancy. Internal policies and processes need to be updated to ensure that the regulations are followed when conducting any workforce planning activities which may result in redundancy processes.
4. The Paternity Leave (Amendment) Regulations 2024
The Paternity Leave (Amendment) Regulations 2024 came into effect on 6th April 2024 and introduced more flexibility for paternity leave. Employees taking statutory paternity leave are now able to split their two weeks’ allowance into two separate one week blocks (previously they had to be taken together).
The updated legislation enables employees to take their leave at any point in the first year after their child’s birth, rather than being restricted to within the first eight weeks after birth. Amendments have also been made to the notice period required for the leave; employees only need to give 28 days’ notice for each week of leave, although the requirement to provide notification of entitlement to take paternity leave 15 weeks prior to the expected week of birth is still in place.
Paternity policies will need to be updated to reflect the changes, and the shorter notice period means you will need to be more prepared to cover for absences within your workforce.
5. Chapter 8 of Income Tax (Earnings and Pensions) Act
Following the same trend, amendments to Chapter 8 of Income Tax (Earnings and Pensions) Act came into effect on 6th April 2024. If you are an employer who engages with contractors outside of IR35, OR if you don’t currently utilise contractors due to concerns around the risks of fines for non-compliance with IR35, you’ll be interested in the below.
The amendments introduce a new offset system that should prevent end user clients from overpaying tax, (known as ‘double taxation’), where HMRC decides there has been a misclassification under the IR35 rules.
Instead of your business receiving an inflated tax bill, HMRC will now offset the tax already paid by a contractor, (by using best judgement and data from any relevant tax returns to reach an estimate), and the assessed amount will be removed from the fine charged to your company.
HMRC calculate the deduction to the total bill based on the employees:
- Corporation tax (paid by the contractor’s intermediary).
- Income tax and employee National Insurance contributions paid to the contractor via their intermediary.
- Class 2 and Class 4 National Insurance contributions.
- Tax paid on dividend payments.
Unfortunately, the offsets don’t include employer National Insurance contributions or the Apprenticeship Levy, so businesses will still be obligated to cover those costs; and although the legislation change is a positive for businesses, it doesn’t apply retrospectively so organisations who have been fined due to incorrect IR35 status determinations historically will not be able to claim relief on any previous payments.
However, the change is still a positive step for UK employment law, easing fears of extreme financial punishment for incorrect IR35 determinations.
In light of these changes, if you’re interested in recruiting contractors to access additional skill sets rapidly or increase internal capacity, we can help. Find out more.
6. Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023
Amendments made to the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which took effect on 1st April 2024, clarify how to accrue and pay holiday for irregular hours and part-year workers, and how to correctly identify such workers.
- Irregular hours workers are those whose hours within each pay period are wholly or mostly variable under the terms of their contract.
- Part-year workers are those who are only required to work for part of the year under their contract, and have a period within the year of at least a week where they are not required to work and are not paid.
The key amendments are outlined below:
- Holiday for irregular hours and part-year workers are now accrued based on 12.07% of the hours worked by the individual in the previous pay period. Where employees have been absent from work, (e.g. on maternity leave), holiday pay is calculated on a 52-week reference period.
- Employers will have the right to implement rolled-up holiday (if they wish to use it). This means that holiday pay for these workers can be paid as an uplift of 12.07% to the ‘normal rate of pay’ at the time the work is completed, instead of being paid at the time the holiday is taken.
- Employees can now carry over all their statutory holiday, if unable to take it due to absence (e.g. family leave or illness).
- An employee who has been unable to take holiday (e.g. employer failed to give reasonable opportunity to take it or failed to tell the employee they would lose the holiday if not used) can now carry over up to 4 weeks leave, although it must be used within 18 months.
- ‘Normal pay’ now includes commission payments linked to performance of the task, payments for personal or professional status relating to length of service, seniority or qualification and overtime payments that have been regularly paid in 52 weeks preceding calculation. This only applies to the four weeks’ holiday derived from EU law, the additional 1.6 weeks of statutory leave can be calculated at basic salary only.
What Else Is On The Horizon?
All the above legislative amendments have already come into force, so understanding them and revising your existing policies now is key to keeping your business and your employees safe.
In addition to these policies, the Government has announced several other amendments on the horizon for 2024/5:
- The Worker Protection (Amendment of Equality Act 2010) Act 2023 (due to come into force on 5th October 2024). The Act will require all employers to be able to show that they have reasonable steps in place to combat sexual harassment in the workplace. If an employee succeeds in a claim for sexual harassment, an Employment Tribunal will be required to consider whether the employer breached its duty to take reasonable steps to prevent sexual harassment and whether to uplift any award of compensation by up to 25%. The Equality and Human Rights Commission will also have powers to enforce the obligation and so will be able to take enforcement action against organisations that are in breach.
- Predictable work patterns (expected to come into force Autumn 2024). This will give workers a right to request a predictable work pattern under the Employment Rights Act 1996, subject to certain eligibility criteria. There will be a one-month timeframe to deal with requests and they should be handled similarly to flexible working requests.
- Neonatal Care Leave (expected to come into force April 2025). Employees will gain the right to up to 12 week’s leave and pay (parents with babies receiving 7 days or more neonatal care within their first 28 days are eligible). This will be a day one right for leave, but 26 weeks’ continuous service is required to receive statutory pay. The leave must be taken within the first 68 weeks of the baby’s birth.
Next Steps
We are already supporting businesses to review and update HR policies and practices to ensure compliance with the new or updated legislations.
Talk to us today about how we can support your business, we are ready to listen.
Get in touch for a free and impartial conversation.
