Six Months To Go: Is Your Business Ready For The Employment Law Reforms Coming Into Force In April 2020?

Change in the employment law sphere rarely slows down - even in the face of Brexit. We are now only six months away from a host of employment law reforms, most of which are scheduled to come into force on 6 April 2020. Below we outline the reforms and the preparatory steps for employers.

Reform of the IR35 regime in the private sector From 6 April 2020, large and medium-sized businesses in the private sector that engage independent contractors via a personal service company (PSC) will become responsible for assessing whether the off payroll working rules (known as IR35) apply. The Government's Check Employment Status Tool is designed to help with this assessment. Once the end-user business has made its assessment it must notify the contractor and the PSC of its decision (and reasons) and provide them with the opportunity to challenge the assessment. Assuming the end-user business is closest to the PSC in the contractual chain, it will also become responsible for deducting income tax and NICs at source through PAYE and paying employer NICs.

Next steps? Identify whether you engage any contractors via a PSC and determine whether the IR35 rules will apply to any such contracts. Check whether your contract with the PSC permits the deduction of income tax and NICs and, if not, enter into revised contracts. Ensure the necessary payroll arrangements are in place for 6 April 2020.

Employment contracts The right to a written statement of particulars of employment will be extended to all workers and must be given on the first day of work. Significantly, the content of the statement will be enhanced. In future, the statement must contain the existing "principal statement" particulars plus some of the existing "supplementary statement" particulars. Further, new particulars relating to working time, paid leave, benefits and probationary periods must also be incorporated into the statement. Only a very limited amount of information may be given separately within two months of starting work, including a brand new requirement to provide particulars of training entitlements.

Next steps? Identify any workers who will need a statement and begin updating template contracts to capture the new requirements in readiness for 6 April 2020.

Calculating holiday pay There will be a change to the reference period used to calculate holiday pay for certain types of workers. Where a worker has variable pay because they have either: (i) no normal working hours; or (ii)...