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Dissecting Employment Legislation - Family Friendly Legislation Changes

Mon, 01 Apr 2024 15:45:00 +0000

Dissecting Employment Legislation - Family Friendly Legislation Changes

In 2024, the government has implemented enhanced legislation to further protect and support families. Understanding these changes is essential for maintaining compliance and fostering a supportive work environment for new and expecting parents.

In this article, we dissect the updated redundancy protection and paternity leave legislation.

Extended Redundancy Protection for Pregnancy and New Parents

Effective from: 6th April 2026

The protected period which only previously covered maternity leave, has now been extended to include pregnancy and a period of 18 months after the birth date. This applies to all individuals with employment status and includes adoption and shared parental leave as follows:

Pregnancy followed by maternity leave – protection starts when the employee informs their employer of their pregnancy and ends 18 months from the date the baby is born.
Adoption Leave – protection starts when adoption leave begins and ends 18 months after the placement date, or when the child enters Great Britain if it’s an overseas adoption.
Shared Parental Leave (SPL) - protection starts when SPL begins. The duration of SPL is considered when determining the length of the protection period:

- Under 6 weeks - the protection period ends when the employee returns to work.

- Over 6 weeks continuous leave – the protection period ends 18 months from the date the baby is born.

Preparing for the change

Update your redundancy policy to communicate the redundancy protection rules for all employees.
Develop a reporting mechanism to easily identify protected employees in the event of a redundancy situation.

Is an employee protected if they informed the employer of their pregnancy before 6th April 2024?

They are protected. It is advisable for these employees to repeat the pregnancy notification to raise awareness to their employer of the extended protection.

What protection applies in the case of miscarriage or stillbirth?

When the miscarriage is in the first 24 weeks of pregnancy, the protected period continues until 2 weeks from the end of the pregnancy. If the child is stillborn after 24 weeks, then the redundancy protection continues for 18 months from the birth date.

How do we determine the 18-month protection period if we do not know the child’s actual birth date?

What is the protection period for an employee who takes several instances of Shared Parental Leave which totals 6 weeks?

The protection period ends when the employee returns to work after each instance of SPL.

Is it illegal to make an employee redundant if they are in a protected position?

The new legislation does not prevent employees from being selected for redundancy. It gives employees priority over suitable vacancies that exist within the company. If there are no suitable alternative vacancies, the employee could still be made redundant.

What counts as a suitable alternative vacancy?

When facing redundancy, an employee may be offered a "suitable alternative vacancy" within their current organisation or an associated company. This vacancy is deemed suitable if it aligns with the employee's skills and experience, and the terms of the new role are comparable to their previous position. This comparison considers factors like salary, responsibility level, working hours, and location.

Can I choose a non-priority candidate that has better qualifications for a suitable alternative vacancy?

While another candidate may possess greater qualifications or experience for a "suitable alternative vacancy," their candidacy becomes irrelevant in the face of an employee with priority status. If the vacancy aligns with the prioritised employee's skillset and experience, offering them the position becomes mandatory, regardless of the other candidate's potential suitability.

What happens if there are multiple priority candidates for one suitable alternative vacancy?

The new rules have no guidelines on this yet. We suggest gathering robust selection criteria to determine which employee is more suitable for the role and keeping a clear record of the fair decision making and rationale you’ve used.

Paternity Leave

Effective from: 6th April 2024

The paternity leave changes signal the government’s response to discussions around work-life balance and gender equality.

Key Changes:

Employees now have the option to take two non-consecutive weeks of leave instead of taking their entitlement in two consecutive weeks.
The period in which paternity leave must be taken extends from 56 days to 52 weeks from the child’s birth or adoption.
Notification requirements have been split so that the notification of entitlement and declaration is required up to the 15th week before the expected week of confinement. The employee must then give 28 days' notice of each leave instance.

Preparing for the change

Update your paternity leave policy to account for the changes.
Check and update any forms that are used for communicating paternity leave.
Communicate the changes to line managers.

As you navigate these changes, it's essential to ensure that your policies and practices align with the updated regulations. Efficient Ops offer professional assistance tailored to employers, providing guidance on navigating these shifts seamlessly.

Contact us today for expert support in staying compliant and fostering a supportive workplace environment for your employees.

Dissecting Employment Legislation - Work Time Regulation Changes

Thu, 22 Feb 2024 16:15:25 +0000

Dissecting Employment Legislation - Work Time Regulation Changes

The Working Time Regulations (WTR) are the backbone of employment in the UK with non-compliance carrying many risks for UK businesses. It is therefore essential to keep abreast of the changes and understand their impact on your procedures. The key changes to the WTR in 2024 are as follows:

In response to the Harpur Trust v Brazel case, the WTD has defined irregular hours and part-year workers. Alongside this, it now explains how to calculate statutory holiday entitlement for this category of workers both when at work and during periods of absence.
The introduction of rolled-up holiday pay.
The Working Time (Coronavirus) (Amendment) Regulations 2020 have been removed so leave carried forward under this regulation must be used by 31st March 2024
The requirement to keep “adequate” records of daily working time for each worker has been relaxed. Instead, employers are only required to keep records to demonstrate compliance with obligations.

Holiday Entitlement changes apply to leave years beginning on or after 1st April 2024.

In detail:

What constitutes an irregular hours worker?
This is a worker who is employed under a casual or zero-hours contract. Their paid hours in each pay period of a leave year must be completely or mostly variable. It does not apply to shift workers who have fixed hours that vary from week to week.

What constitutes a part-year worker?
This is a worker who is only contracted to work part of the leave year and has periods of at least 1 week in which they aren’t required to work and aren’t paid. This does not include salaried workers who have periods when they aren’t required to work as they continue to receive pay whilst they aren’t working.

Our holiday year runs from January to December, do we need to recalculate leave for these workers from April?
No, the change will only be applicable from the start of your leave year. In this case, from January 2025.

How is statutory holiday entitlement calculated for this category of worker?
Statutory holiday entitlement is 12.07% of actual hours worked in a pay period. This percentage represents the statutory holiday entitlement (5.6 weeks) divided by the number of working weeks in the year (46.4 weeks). Accrued holidays for this category of worker are calculated at the end of a pay period.

For Example, if a worker worked 80 hours in the pay period, their leave would be calculated as follows:

80 x (12.07/100) = 9.656 hours.

This result is rounded up or down to the nearest whole hour so in this case, the worker has accrued 10 hours leave.

Is the calculation different if our organisation offers enhanced annual leave?
Yes. If your organisation offers enhanced holiday entitlement, then the multiplier will be different. It can be calculated as follows:

Full holiday entitlement including bank holidays / 52 weeks – full holiday entitlement

Eg if you offer all employees 25 days annual leave, this equates to 6.6 weeks leave including bank holidays:

6.6 weeks / 45.4 weeks (52-6.6) = 14.54%

How is the rate of pay calculated for Irregular or part-year workers when taken?
To calculate the pay rate, a week should considered as starting on Sunday and ending on Saturday. Starting with the week ending on the Saturday prior to the leave, add up the payments for the last 52 weeks worked going back to a maximum of 104 weeks.

This total should then be divided by 52 to obtain the rate of pay for a week’s holiday.

If the employee hasn’t worked for 52 weeks in the previous 104 weeks for any reason then you should just calculate the average pay based on the number of weeks worked.

How is leave accrued for irregular or part-year workers when absent due to sickness or maternity?
The leave entitlement is calculated based on a 52-week relevant period which starts the day before the first day of absence.

Calculate the average hours worked per week as follows:

Total hours worked in period / 46.4 (possible working weeks in a year) = Average working hours per week

Now calculate the holiday accrual for each week as follows:

Average Hours per week x (12.07/100) = leave accrued per week

To calculate the total number of hours accrued

Leave accrued per week x no. of weeks absent

What if the employee was absent due to sickness or family-related leave in the 52 week relevant period?
These weeks should be discounted from the calculation and the period extended by this number of weeks.

For example, if an employee has 3 weeks of sickness absence in the 52-week relevant period, then these weeks should be discounted, and the relevant period should be extended to 55 weeks.

What if the employee has been employed for fewer than 52 weeks?
In this case, the relevant period should be reduced to cover the number of full weeks the worker has been employed.

What is rolled-up holiday pay?
Rolled-up holiday pay is added to every payment a worker receives instead of accruing holiday entitlement. It can only be used for part-year and irregular workers. It is important to ensure there is the provision in the worker's contract before applying rolled-up holiday pay.

How is rolled-up holiday pay calculated?
You can calculate rolled-up holiday pay using the following formula:

Total normal pay in the pay period x (12.07 x 100). The answer should then be rounded up or down to the nearest pence.

Need help adjusting to the new regulations? Get expert help!

Five Payroll Pitfalls Every UK Business Should Avoid

Wed, 17 Jan 2024 15:36:57 +0000

Five Payroll Pitfalls Every UK Business Should Avoid

Payroll: the lifeblood of your business, keeping your team happy and productive with timely, accurate payments. But even the most seasoned HR professionals can stumble in this complex landscape. Navigating ever-evolving regulations and intricate tax codes adds another layer of challenge. To help you avoid costly mistakes and maintain smooth employee relations, here are five common payroll pitfalls UK businesses should avoid:

Missing HMRC deadlines

Late PAYE and National Insurance payments to HMRC can come with hefty penalties, starting at 1% for minor slip-ups and escalating quickly. Streamline your process with clear, documented deadlines from data collection to submission. Automate where possible and consider delegating or outsourcing if the workload feels overwhelming.

Challenges of Pension Compliance

The responsibility of auto-enrolment lies with the employer. The intricacies of auto-enrolment pension schemes can confuse and ultimately result in non-compliance. You must understand your employer's duties and deadlines, accurately calculate contributions, and keep detailed records. Invest in automated systems or reliable payroll consultants like Efficient Ops to avoid manual errors and streamline the process.

Miscalculating Pay, including Inaccurate Tax Calculations

Miscalculating pay can affect employee trust and trigger disputes. Every number needs to be spot-on, from essential hours and overtime to complex deductions and bonuses. Double-check all calculations, implement thorough audits, and invest in reliable payroll software with built-in error checks. Consulting third-party experts like Efficient Ops is a cost-effective way of ensuring accurate payslips and keeping employees happy.

Applying the wrong tax code can lead to overpayments or underpayments, leaving you and your employees with tax headaches. Implement robust procedures for verifying and updating tax codes, including obtaining P45s for new hires and automating, where possible, HMRC updates when circumstances change.

Failure to Maintain Payroll Records

Accurate record-keeping is essential for compliance and transparency. Failing to maintain complete and organised payroll records can make responding to audits, investigations, or employee queries challenging. Establish a structured record-keeping system that includes pay slips, tax calculations, and pension contributions. Alternatively, consider investing in payroll software to store electronic records securely and create a backup system to prevent data loss.

Not providing payroll documentation

Payslips contain information such as payroll number, gross and net pay, tax code, and the amount of any deductions that change from payday to payday. Payslips are essential documents that provide employees with a record of their earnings and can be used as proof of earnings for things like mortgage applications.

How to avoid mistakes in payroll?

Stay updated: Knowledge is power! Keep abreast of changing regulations and HMRC requirements through training, professional subscriptions, and attending relevant webinars.

Embrace technology: Invest in modern payroll software and automation tools to minimise manual errors and improve efficiency.

Seek support: Don't hesitate to seek professional advice from qualified accountants or payroll specialists.

Documentation is key:Maintain clear, accurate records of all payroll processes and decisions for future reference and audit purposes.

Business owners and managers must not underestimate the pitfalls of minor details as Payroll is an intricate function requiring dedicated resources. While small businesses might still need the necessary resources, larger companies might still need to have the system in place to avoid these common mistakes. Doing continuous research and familiarising yourself with government legislation is critical. Make sure you ask for professional help when you're unsure – book a free discovery call with Efficient Ops.

written by Sahira Hussain