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National Minimum Wage and National Living Wage increases April 2020

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Last night the Government announced the National Minimum and Living Wage increases for 2020

The National Living Wage, for those 25+ will become £8.72 p/h

The rate for 21 to 24 years olds will become £8.20 p/h

For companies that strive to give “The Real Living Wage”, set by independent experts and championed by the Living Wage Foundation, this is £9.30 an hour rising to £10.75 in London, where costs are higher.  It is earned by all workers regardless of their age.

April 2020 changes

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Written statement of key terms

All workers, including employees starting work on or after 6 April 2020, will be entitled to a written statement of key terms on or before the date they start. This will need to include additional details such as any probationary period and training entitlements.

Key facts for agency workers

All employers will be required to provide agency workers with a key information document containing prescribed information including:

  • their type of contract;
  • the minimum expected rate of pay;
  • how they will be paid and by whom (for example, an intermediary or umbrella company);
  • any deductions or fees that will be taken;
  • any non-monetary benefits to which they will be entitled; and
  • any entitlement to annual leave and payment in respect of such leave, and an illustrative example of what this might mean for take-home pay.

Holiday reference period

The holiday pay reference period for determining a week’s pay is changing from 12 to 52 weeks. This will ensure those who do not work a regular pattern throughout the year are not disadvantaged by having to take their holiday at a quiet time of the year when their weekly pay might be lower.

The 52-week reference period will apply to all calculations of statutory holiday pay under the Working Time Regulations 1998, in which the 12-week reference period would otherwise have been used. In other words, this will affect workers with no normal working hours, and workers with normal working hours whose pay varies with the amount of work done or the times or days on which it is done. Employers need to make sure they are calculating holiday pay in the correct way.

Information and consultation thresholds

The threshold required for a valid employee request to negotiate an agreement on informing and consulting its employees will be lowered from 10 per cent to 2 per cent of employees, subject to the existing minimum of 15 employees.

IR35 and off-payroll rules

Tax legislation IR35 will be extended to the private sector from April 2020. The responsibility for determining employment status for tax purposes will shift to the employer. Businesses should ensure they have an action plan to review their current arrangements with off-payroll workers, their internal systems and their policies should the changes apply to them.

National insurance contributions on termination payments

Class 1A employer national insurance contributions will be payable on termination payments of more than £30,000.

The Parental Bereavement (Leave and Pay) Act 2018

Legislation is expected entitling all employed parents or carers to a day-one right to two weeks leave if they lose a child under the age of 18 or suffer a stillbirth after 24 weeks of pregnancy. If the employee has more than 26 weeks of continuous service, they’re entitled to the statutory rate for this two-week period – otherwise, the leave will be unpaid.

 

Do you have to give a reference?

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Currently no, however, there is proposed legislation which will prevent employers withholding references to protect individuals who have faced discrimination/harassment from being intimidated.  It isn’t clear whether this will be implemented or not at this time.

The advice – just give a basic reference with start date, end date and job title!

FCA update:

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The Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime (APR) for solo-regulated firms from 9 December 2019. The regime aims to reduce harm to consumers and strengthen market integrity. It sets a new standard of personal conduct for everyone working in financial services.

The SM&CR encourages greater individual accountability and sets a new standard of personal conduct in financial services by:

  • ensuring senior managers are accountable for conduct in their areas of responsibility
  • ensuring a minimum standard of behaviour for everybody working in the sector through our 5 Conduct Rules
  • enhancing professionalism in the industry by requiring firms to certify that their staff are fit and proper

https://www.fca.org.uk/firms/senior-managers-certification-regime/solo-regulated-firms

What to expect in 2020….

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  • The Good Work Plan – outlines an intention to legislate to improve working conditions for agency workers, zero-hour workers and other atypical workers, although many of the measures do not yet have specific timescales. The measures for which legislation has already been published are mostly due to come into force in April 2020.

 

  • Mandatory reporting of the ratio between CEO pay and average staff pay for companies with 250 or more employees, and a package of other corporate governance changes, all of which will be effective for accounting periods beginning on or after 1 January 2019 (and so the first pay ratio reports will be published in 2020).

 

  • Consultation should close on Ethnicity gap reporting, Employment Status clarification and Salary Sacrifice Schemes.

A Testimonial from Casicare

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08/11/2019.

I am writing to thank Johanna and the team at Elcons for the wonderful support and service given to Casicare as a new client. We have transferred to Elcon’s having a multiple of immediate needs as we had completed several changes in the way we operated our business.

As part of the introduction we have been given a personal and attentive service with expertise, solid advice and information that was clear and concise. We were introduced to our dedicated advisors and an insight into the philosophy and motivation of the company and how it works for a client.

In a short period of time we have reorganized our employment law arrangements with all our key managers trained and competent in current employment issues and legislation, new company handbooks, contracts and paperwork to every eventuality.

Complex issues have been dealt with effectively such as TUPE and preparation for Employment tribunals with expertise and have taken the burden off us with sound legal representation.

Professional in all aspect of their work and genuinely listen and understand the challenges of the Care sector. I would recommend anyone needing a straightforward approach with an understanding of the industry to consider Elcons. I have wasted too much time and money finding the wrong advice and now I’m satisfied I have found the best.

 

Janet Thompson.

Casicare.

Director.

150 employees – 2 Locations

Financial advisor was ‘blackmailed’ to sign restrictive covenant

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A financial advisor has won a claim for unfair dismissal after his employer made false allegations to pressurise him into accepting an extended restrictive covenant agreement and attempted to stop him joining a potential competitor, an ET has ruled.

The Nottingham ET found Peter Ward was constructively and unfairly dismissed by Fiducia Comprehensive Financial Planning after he claimed one of its directors “blackmailed” him, or threatened to do so, unless he signed an agreement lengthening his post-termination restrictive covenants.

The judge said: “While the term ‘blackmail’ may be somewhat emotive, there is no doubt that [Fiducia] made it clear to [Ward] that if he refused to sign the new draft agreement they would pursue allegations of gross misconduct against him which would undoubtedly tarnish his professional reputation.”

https://www.peoplemanagement.co.uk/news/articles/financial-advisor-unfairly-dismissed-blackmailed-to-sign-restrictive-covenant