Key Employment Law Changes During 2024
As the New Year arrives, we thought it would be a good time to send a summary of the key changes to employment law that are planned or anticipated to take place during 2024.
The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023
On 1 January, new rules relating to working time records comes into effect. The Employment Rights Regulations clarify that the obligation on employers is to keep adequate records to show compliance with certain limits (e.g. 48-hour average weekly working limit, etc) and that employers may create, maintain and keep such records in such manner and format as the employer reasonably thinks fit. However, employers need not record each worker’s daily working hours if they are able to demonstrate compliance without doing so.
Holiday pay calculations
The Government have codified within the Working Time Regs, the principle of an employee receiving “normal remuneration” during the four weeks of annual holiday that is derived from EU legislation. (Note the WTR derived holiday of 1.6 weeks is not impacted). From 1 January 2024, holiday pay for EU derived leave (4 weeks of the statutory holiday entitlement) must include:
- Payments, including commission payments, which are intrinsically linked to the performance or tasks which a worker is obliged to carry out under the terms of their contract;
- payments for professional or personal status relating to length of service, seniority or professional qualifications;
- other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date.
Note: There is still a lot of legal speculation regarding the inclusion of certain payments and it will be left to the domestic courts to interpret their meaning. For example, do annual discretionary bonuses count, if they are payments intrinsically linked to the performance or tasks which a worker is obliged to carry out? What does it mean in practice that a payment has been “regularly paid to a worker” - how regular is regular?
These types of payments are also to be included in respect of holiday pay calculations for irregular hours and part year workers I respect of leave years beginning on or after 1 April 2024 (see overleaf – April 2024).
Drop in National Insurance Contributions
From 6 January 2024 the main rate of National Insurance (NI) for employees will be cut to 10%. It’s currently charged at 12% on earnings between £12,571 and £50,271 and 2% on anything above that. NI is not payable on the first £12,571 of earnings.
Increased Financial Penalties for Employing Illegal Workers
From 22 January 2024, employers in the UK will face penalties of up to £45,000 per illegal worker for a first breach, increasing from £15,000. Repeated breaches will result in steep fines of up to £60,000 per illegal worker – up from the current £20,000.
Increases in the National Living Wage (NLW)
From 1 April 2024, the NLW bandings will increase and partially change as shown below, including that those aged 21 and upwards will be included in the highest pay banding, and not just those who are aged 23 and over.
Workers aged 21 or over £11.44 up from £10.42 per hour
Aged 18 – 20 £8.60 up from £7.49
Aged under 18 £6.40 up from £5.28
Apprentice rate £6.40 up from £5.28
Changes to calculation of holiday entitlement for variable hours and part year workers
If your company’s holiday year starts on or after 1 April 2024, if you wish, you will be able to use a new method to calculate holiday entitlement for variable hours workers such as those on zero hours, part year or casual contracts. If your company’s holiday year starts between 1 January 2024 and 31 March 2024 then you’ll have to wait to implement the new calculation method for these workers until your 2025 holiday year starts.
The new method will allow employers to calculate holiday entitlement for these types of worker by multiplying hours worked by 12.07% (equivalent to the statutory minimum holiday entitlement of 5.6 weeks). This method of calculation was very popular previously until it was deemed unlawful as a result of the Harpur Trust v Brazell case.
Re-introduction of ‘Rolled Up’ Holiday Pay
In line with the above changes to calculation of holiday pay as from April 2024 we see the return of ‘rolled up’ holiday pay which is ideal for use with seasonal, irregular, casual or zero hours staff. If required, these staff can be paid for accrued holiday at the same time as they are paid for the work they have carried out. These types of worker will accrue their holiday entitlement on the last day of each pay period using the 12.07% multiplier. Important to note that when a multiplier is used to calculate holiday entitlement and pay for these types of staff, the pay must be itemized on the employee’s pay slip.
Employment Relations (Flexible Working) Act 2023
From 6 April 2024 employees will be able to request flexible working from the first day of employment. The Act will cover rights to request flexibility over part time, term time, flexitime, compressed hours, place of work and start and finish times.
All employees will have a Day One right to request flexible working – they will no longer need to have 26 weeks service. It is likely, though not yet confirmed, that employees will be able to make two requests within any 12-month period as opposed to the current limit of one. Employees will no long need to provide an explanation as to the impact the revised working arrangements may have on the business, department or colleagues. Important points to note include that employers must respond to a request within two months of receiving it and , they will be obliged to consult with the employee to try and identify a compromise, if the request is going to be rejected.
The Carer's Leave Act 2023 (Commencement) Regulations 2023
From 6 April 2024, existing and new employees will have a statutory right to one week’s unpaid leave to care for a dependant. For employees who join on or after 6 April 2024, the new right will apply from their first day of employment. Carer’s leave is intended to allow an employee to provide or arrange care for a dependant with a long-term care need. Employees who are unpaid carers for a relative or another dependant, will be entitled to take up to 5 days unpaid leave each year to care for that dependant. Requests for carer’s leave must be given in writing to the employer and give notice which is at least twice the length of time required off work.
Protection from Redundancy (Pregnancy & Family Leave) Act 2023
It is expected that as from 6 April 2024, the above mentioned Act will extend the existing right—to be offered a suitable alternative vacancy (if available) before being made redundant during maternity, adoption or shared parental leave—to “during or after” such periods of leave and to “during or after” a protected period of pregnancy.
Employment (Allocation of Tips) Act 2023
New rules will place obligations on employers in respect of qualifying tips, gratuities, and service charges paid at or attributable to a place of business, to be allocated fairly by the employer between workers (and eligible agency workers).
Amendment to the TUPE Regulations
In relation to TUPE transfers taking place on or after July 2024, the TUPE Regulations will be amended to allow direct consultation with employees (rather than the current requirement for representatives to be elected if appropriate representatives are not in place already) in situations where either: the business has fewer than 50 employees; or the proposed transfer involves fewer than 10 employees.
The Worker’s (Predictable Terms and Conditions) Act 2023
This legislation, which is expected to come into force in September 2024, will introduce a statutory right for eligible workers and agency workers who have a lack of predictability in relation to any part of their working pattern, to request a more predictable work pattern, subject to meeting qualifying criteria. Further regulations are required to specify details and to bring the rights into force.
The Worker Protection (Amendment of Equality Act 2010) Act 2023
This new Act, which is expected to come into force from October 2024) will introduce a proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment.
There are lots of other employment law changes in the pipeline and so 2024 looks set to be a busy year from an employment law perspective. We must also not overlook the fact that there may be further legal developments following the passing of the Retained EU Law Revocation and Reform Act 2023, earlier this year. As ever, Rely HR & Training is here to help clarify exactly what these employment law changes mean for your specific business and to help you navigate any challenges that may arise.
Please contact us to arrange a complimentary review of your employee handbook, employment contract templates and related documentation or for further information about any of the employment law changes we’ve included in this news bulletin.
With best wishes for a happy and prosperous New Year
Nicky Cooksley Hannah Gammon
Director HR Consultant
M: 07771 93431 M: 07399 304644