As we head into the new year, staying ahead of the latest employment law updates is essential for both employers and employees. In this ever-evolving landscape, here are the employment law updates you need to know about in 2024 and what you should consider about each.
1st January 2024: changes to holiday pay
Draft legislation aims to reform holiday pay for part-time workers and workers with irregular hours. This means holiday pay entitlement for these workers will be calculated at 12.07% of the hours worked (in a pay period). The aim is to give greater transparency and level the playing field for such workers.
Rolled-up holiday pay enables employers to include an amount for holiday pay on top of the hourly rate in regular pay packets. In 2006 it was made unlawful following the concern that workers may be more incentivised not to take leave as they could earn more. However, it will now be allowed but only for part-time workers, irregular hours workers, and some agency workers. It will apply to employers with holiday years starting after 1 April 2024.
Advice for employers: verify the eligibility of their staff and review processes to ensure you are legally compliant. Note that this is subject to a maximum of 28 days per year. Any rolled-up holiday pay must be detailed on the workers’ payslip. The 12.07% needs to be adjusted to account for any contractual leave offered beyond the statutory entitlement. If the worker chooses this option then any holiday they take would be unpaid as they would have already received their holiday pay whilst working.
6th January 2024: National Insurance cuts
In his Autumn Statement, the chancellor announced the main rate of Employee National Insurance will be cut by 2 percentage points from 12% to 10% from January.
Advice for employers: ensure your payroll is set up to reflect these changes.
1st April: National Minimum Wage increases
The National Minimum Wage will increase to £11.44 per hour for anyone 21 and over. The National Living Wage band will also be expanded to include workers aged 21 and over (previously it applied to anyone aged 23 and over). The national minimum wage for workers aged 18 – 20 will increase from £7.49 per hour to £8.60.
These are the largest ever increases we’ve seen to the minimum wage. Whilst this will be welcomed by those receiving minimum wage, it has implications for businesses that will need to balance pay versus profit. 2024 may be the most important year for pay reviews, as staff continue to grapple with the cost of living.
Advice for employers: review and increase those who earn rates close to NMW and NLW to keep a clear differential in the workforce between the minimum payment rate. Ensure your payroll reflects these changes.
1st April: Occupational and Personal Pension Schemes (General Levy) (Amendment) Regulations 2024
These regulations introduce new rates that will be used to calculate the general levy payable by occupational and personal pension schemes.
Having consulted on options for mitigating the ongoing deficit in levy funding, the Government has decided to retain the current levy structure and increase rates by 6.5% per year for all schemes.
The general levy recovers the core running costs of the Pensions Regulator and the Pensions Ombudsman. It also covers those aspects of the Money and Pensions Service (MaPS) which relate to general pensions guidance and elements of the pensions dashboard.
6th April: Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024
This legislation received Royal Ascent in 2023 and aims to enhance redundancy protection for pregnant and workers and those working parents on return to the workplace. These regulations bring into force the Protection from Redundancy (Pregnancy and Family Leave) Act 2023, extending the period of special protection from redundancy for employees on maternity, adoption or shared parental leave to 18 months after birth or adoption, and during pregnancy.
Advice for employers: update policies and procedures to reflect these changes.
6th April: Changes to paternity leave
As part of the Paternity Leave Amendment Regulations 2024, the legislation allows paternity leave to be split into two blocks of one week at any point in the first year after the birth or adoption of a child. It applies in all cases where the expected week of childbirth falls after 6th April 2024.
Advice for employers: update paternity policies to reflect these changes.
6th April: Flexible Working (Amendment) Regulations 2023
Currently, employees can put in one flexible working request which includes working from home, job sharing, or a change in hours per year. They need to have 26 weeks of continuous employment to make this request. A key change to this is the right to request flexible working from day one of employment. In addition, employees can make two requests in 12 months. Employers will have two months to respond to the request and must consult with the employee and provide a reason for rejecting a request. Employees will not be required to explain the effect, if any, the change might have on the employer.
Advice for employers: ensure you have a flexible working policy in place so that the correct process is followed as and when requests are received. This policy will need to be updated to reflect these new rights. Be aware that an employee may not lawfully be dismissed, selected for redundancy, victimised, or subjected to any other detriment for asserting their right to apply for flexible working. They should also be aware that refusal to grant a request for flexible working may risk a discrimination claim.
6th April: The Carer’s Leave Regulations 2024
This allows carer’s one week of unpaid leave each year. This will is applicable from day one of employment without the need for documentation, beyond self-certification. Leave can be taken by employees to provide or arrange care for a dependent with a long-term care need. This applies to spouses / civil partners, children, parents, or someone who lives in the same household (not a tenant or lodger). Find more info here: https://www.legislation.gov.uk/ukpga/2023/18/enacted
Advice for employers: Review current policies and update to reflect this right. Consider training managers to deal with these requests and manage workloads effectively.
6th April: National Insurance Contributions (Reduction in Rates) Act 2023
This Bill introduces a cut in the main rate of primary (employee) Class 1 National Insurance contributions (NICs) from 10% to 8% and a cut in the main rate of self-employed Class 4 NICs from the previously announced rate of 8% to 6%.
Advice for employers: ensure your payroll is set up to reflect this reduction.
July 2024: TUPE transfers for smaller employers
Reforms also see changes to Transfer of Undertakings Protection of Employment (TUPE) – designed to protect employees (and benefits) when they transfer from one organisation to another following an acquisition or a transfer of services. The changes will now allow small employers to consult with their new employees directly – but only if there are no existing elected representatives in place (including trade unions). Where these are in place, employers will be required to consult with them.
This applies to smaller-scale TUPE transfers after 1 July 2024 and:
- If the employer has less than 50 employees (irrespective of the size of the transfer)
- Where the proposed transfer includes less than 10 employees (irrespective of the size of the employer).
Advice for employers: This will make the requirement to inform and consult less onerous for small employers or small transfers. TUPE remains a complex area of employment law, and advice should be taken ahead of any proposed transfer to ensure the correct process is followed.
September 2024: Workers (Predictable Terms and Conditions) Act 2023
The Workers (Predictable Terms and Conditions) Act 2023 allows workers the new right to request more predictable working patterns. This could be anything around working hours, times of work, and days of the week, with a request to provide certainty in their role. It’s currently in consultation but is expected to come into force around September 2024. This refers to agency workers and those whose existing working patterns are uncertain due to the hours or the times they work. Indications suggest that the qualifying period for this right will be one month of service in the 26 weeks leading up to the request and that two applications can be made within 12 months. It’s also likely that the reasons for rejection will be similar to flexible working conditions.
Advice for employers: To start looking at what predictable working requests they might be able to accommodate. If any of their current working practices could be adapted to better suit the needs of employees. It will be important to ensure that when the legislation comes into force a fair and consistent process is followed for all employees and equal treatment is applied.
26th October 2024: The Worker Protection (Amendment of Equality Act 2010) Act 2023
New legislation will require employers to take reasonable, proactive steps to prevent sexual harassment of all employees in the course of their employment. It applies to all genders. The new Act does not create a new category of protection as sexual harassment has been unlawful for several years under The Equality Act. However, the amendment now places a duty on employers to take “reasonable steps” to prevent sexual harassment of their employees. It also provides that an award of compensation for sexual harassment can be increased by up to 25% at the final hearing at a tribunal.
Advice for employers: review and update policies and procedures that deal with harassment, such as anti-harassment and dignity at work policies. Employers should look to create a company culture where employees are encouraged to speak up about concerns. Also, consider staff training on what is not acceptable behaviour.
Other updates to employment law expected include:
- Employment (Allocation of Tips) Act 2023
The new legislation will require all employers to ensure all tips and service charges are allocated transparently and fairly between workers at the place of business. It will also require tips to be paid to workers no later than the end of the month that follows the month in which the payment was made by the customer. Employers will need a clear written policy on how they deal with tips and will need to keep records of these payments for three years.
Advice for employers: it’s advisable to create a policy ahead of this act to ensure there is a clear process for staff receiving gratuities.
- Changes to work visas
The Home Secretary announced plans to change the minimum salary threshold for a skilled worker visa in the UK from £26,200 to £38,700. He also plans to scrap the 20% discount on salaries for roles on the shortage occupation list (SOL), and increase the minimum income for family visas to the same level as for skilled workers.
Advice for employers: There are several changes proposed that will have a significant impact on the visa requirements and costs for both employer and employee. Advice should be taken when considering visa sponsorship.
Expected, but not yet confirmed
Pensions (Extension of Automatic Enrolment) Act 2023 received Royal Assent on 18 September 2023. This lowers the age limit for workers to be automatically enrolled in a pension scheme by their employer from 22 to 18.
Factors for employers to consider in 2024
With no sign of easing, the cost-of-living crisis will continue to be a major issue for many in 2024. Despite some stability with energy prices, the cost of housing remains high, with a 10 – 12% increase in rental costs and mortgages now accounting for at least 25% of monthly salaries. Pay rises in 2024 will be more important than ever, with businesses facing the challenges of balancing pay and profit.
Staff benefits will play an important part in the recruitment and retention of staff. With NHS waiting lists at an all-time high, health benefits are an attractive draw for many workers. With wait times over a year for some procedures, this will have an inevitable impact on productivity and is a consideration for businesses when selecting staff benefits. We advise conducting a staff survey to find out what’s at the top of the priority list for employees.