2019 will see some changes to employment law that any small business owner employing staff needs to be aware of.
- Increases in National Living Wage and National Minimum Wage
As announced in the Autumn budget, the National Living Wage will increase by 4.9% from April 2019. This sees it rising from £7.83 per hour to £8.21 for employees who are 25 and over.
The National Minimum Wage will increase from April 2019 for the following groups:
- 21 – 24-year olds: from £7.38 per hour to £7.70 per hour.
- 18 – 20-year olds: from £5.90 to £6.15 per hour.
- 16 – 17-year olds: from £4.20 per hour to £4.35 per hour.
- Apprentices: there is a 5.4% national minimum wage increase from £3.70 per hour to £3.90 per hour if the apprentice is under 19, or if they are 19 or over, they must be within the first year of their apprenticeship.
These changes will need to be in place for the April 2019 payroll.
2. Increase in Auto-enrolment contributions
From April 2019 auto-enrolment contribution rates will rise from a minimum of 5% to 8% of earnings (which means 5% from the employee and 3% from employers).
The changes apply to all employers with staff in a pension scheme, whether its auto-enrolment or an existing scheme.
According to the Pensions Regulator, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment or you are already paying above the increased minimum amounts.
This will vary according to the type of scheme you hold, and its rules. The Pensions Regulator advises “Most employers use pension schemes that from April 2018 require a total minimum of 5% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings.”
Current rates:
- Minimum
employer contribution: 2% - Minimum
employee contribution: 3% - Minimum
total contribution: 5%
From April 2019
- Minimum
employer contribution: 3% - Minimum
employee contribution: 5% - Minimum
total contribution: 8%
With nearly 10 million people using the scheme, now is the time to communicate this to staff.
3. Settled status for EU nationals
Workers from Europe living in the UK may be able to remain indefinitely in the UK after December 2020 if they apply for settled status in 2019. To do this the must prove that they have been living in the UK for five years at the date of application. Applications open on 30th March 2019.
If in doubt about an employee’s right to work or right to remain, we’d recommend taking specialist advice and we can put you in touch a provider who specialise in immigration services.
4. Changes to payslips
From 6 April, all employers will be required to itemise payslips for employees and these will vary depending on how much time they have worked. These must now include:
- The number of hours the employee is being paid for
- Show the combined number of hours worked for which the employee is being paid or itemise the figures for different types of work and /or rate of pay.
This new legislation is aimed to help those employees who work varied hours and therefore whose pay changes accordingly.
Employers will need to make sure that their payroll process can collect and display the information required and amend the format of their payslips ahead of April 2019.
Get in touch if you would like any advice about HR issues in 2019.