2019 was a busy year for employment law, but 2020 is set to be even busier. This article by the MIA’s trusted business support helpline partner, Croner, explores some key areas that employers need to be aware of over the next few months…
2020’s top legal developments
1. CEO pay ratio reporting
If you’ve had—in a year—an average of more than 250 employees you’re expected to report your executive pay gap. This means you must compare your CEO’s most recent remuneration against your full time employees. You must also accompany this report with explanatory information.
The government hopes that this will allow interested parties to understand the remuneration policies across the organisation and how it compares to the executive pay policy.
CEO pay ratio reporting begins from 1st January.
2. Statement of main terms (SMTs)
The provision of SMTs will become a day one right for employees and workers from 6 April 2020.
The statement will also need to contain additional details for the first time. This includes:
- Entitlement to family friendly leave
- Clarification of any probationary periods
- Confirmation of which specific days and times individuals are required to work.
3. Extension of holiday pay reference period
The holiday pay reference period will be extended from 12 to 52 weeks from April 2020.
This period is used to calculate the average pay of those who work irregular hours. The aim of extending it is to provide a fairer approach to holiday pay. Particularly when workers are carrying out flexible hours.
It will be important for organisations to keep track of employees’ working time throughout the year. This includes overtime, to ensure they are correctly remunerated whilst on annual leave.
4. End of Swedish derogation contracts
Organisations will no longer be able to make use of Swedish derogation contracts from 6 April 2020.
These contracts, which allow employers to avoid providing agency workers with equal pay after 12 weeks’ of an assignment, will become unlawful.
Once in force, all agency workers will become entitled to equality of pay once they reach 12 weeks’ service within one assignment. ‘Equality of pay’ refers to pay when compared to comparable full-time employees. Employment businesses will have to notify their agency workers of this change by providing them with a written statement by 30 April 2020.
5. Agency Workers ‘Key facts’ page
From 6 April 2020, agency work-seekers will have a right to receive a key information document. This is to help them make informed choices about the work they accept.
The document must clarify specific matters including the type of contract the worker is employed under and their minimum rate of pay.
How to prepare for change
Many changes are on the horizon. That why it’s important to remain fully up to date with the legal requirements. Further provisions of the Good Work Plan are still in the pipeline. Brexit is now very much a reality. These are just the changes we’re aware of.
Employment law is likely to see even more developments over the next few years. So prepare yourself by enlisting the help of the employment law experts.
For any advice or guidance on managing these incidents, or if you have wider HR queries, all MIA members have free access to Croner’s member support helpline. Email firstname.lastname@example.org or call 01403 800500 for the exclusive Business Support Helpline scheme number.