The latest changes impacting employers with UK employees

Below, we outline some of the legislative highlights to consider as part of your wider HR strategy.

It is important to make sure that your HR policies have been updated in advance of the changes taking place or as soon as possible thereafter.

Changes include:

• More robust Right to Work fines for non-compliance
• Increases in minimum and living wage and statutory entitlement rates
• Flexible working for all
• Holiday / annual leave and pay
• Paternity leave options
• The introduction of carers leave
• An extension of redundancy protection for new parent or expectant employees
• A relaxation of TUPE consultation rules
• Increased harassment obligations

Right to work penalty increased

Where an employer is found to be employing a person who does not have the right to work in the UK and the correct checks prior to employment were not undertaken, the employer could be liable to pay a fine of £45k per offence in the first breach, which is increased to £60k for repeat breaches within a three-year period for each illegal worker thereafter.

Minimum and living wage increases

From 1 April 2024, the national minimum and living wage have increased with the living wage age eligibility bracket changing from 23 and over to 21 and over:

Increases to statutory rates

From 7 April 2024 (6 April 2024 for sick pay), the following rates apply for statutory leave:

Changes to flexible working

From 6 April 2024, the right to make a flexible work request has become a right from the first day of employment.
Employees will be able to make up to two requests per year, and the employer will have two months to deal with each request.

Similar to the current regulation, refusal of a flexible working request may only be made in line with one of the eight statutory reasons. There must be a consultation period with the employee before refusal, but consultation is recommended regardless of refusal/acceptance.

Carry over of holiday / annual leave

Workers are entitled to a statutory minimum of 5.6 weeks of holiday in a relevant year (made up of 4 weeks of annual leave and 1.6 weeks of public holidays).

The position on the carry over of annual leave will generally remain the same in that holiday should be taken in the year it is accrued unless exceptions apply such as the individual was on a parental leave, was out due to sickness or was not given the opportunity to take leave, etc. Public holidays may only be carried forward with the agreement between the worker and employer or if the worker was unable to take the leave as a result of a parental leave, for example.

Previously, there was a provision for holiday to be carried over in relation to COVID-19, which will now be removed, however there remains an exception for employees who have been unable to take their holiday due to maternity leave or sick leave. In this instance, the carried over leave must be used within 18 months following the end of the holiday year in which that the leave was originally accrued in.

Holiday pay and accrual for part-time and irregular workers

The Government implemented changes to the Working Time Regulations at the start of 2024, which may have come as a relief to many employers with UK employees. This has resulted in a simplified calculation for irregular/part-year workers when it comes to calculating holiday entitlement.

Holiday pay is now calculated at a rate of 12.07% of hours worked in the applicable period (based on the statutory minimum holiday entitlement). This can be paid in the monthly payroll based on hours worked, rather than being paid if the worker takes leave which proves much less of an administrative burden.

This is applicable to those whose holiday years began on or after 1 April 2024. This means that if your holiday year began on 1 January 2024, you will not be able to apply this method until 1 January 2025.

For your irregular/part-year workers, now is a great opportunity to plan contract reviews and clause amendments to ensure that contracts stay compliant with changing legislation.

Changes to statutory paternity leave

Previously, secondary carers were entitled to benefit from up to two weeks of paternity leave, payable at the statutory rate applicable to the current financial year. This leave could only be taken consecutively as either one block of one week or two weeks.

From 6 April 2024, eligible employees can take their two-week entitlement in either two blocks of one week, one block of one week or one block of two weeks, this no longer needs to be consecutive.

When paternity leave can be taken has also become more flexible and can be taken within 52 weeks following the birth/adoption, rather than within 56 days of the birth/placement.

The notice period requirements has also been amended meaning that after 6 April 2024, eligible employees must confirm only the due date at least 15 weeks before the baby is expected. Employees previously had to confirm when the wished to begin paternity leave and how long they would take from the initial stage. The employee must then confirm the date they would like paternity leave to start and how much leave they intend to take 28 days prior to each period of leave commencing. Adoption notification periods remain as before.

Your paternity leave policies should be reviewed and updated as soon as possible to capture the changes.

Unpaid carers leave

From 6 April 2024, employees will be entitled to up to one week unpaid carer’s leave in a 12-month rolling period, which will be a right from the first day of employment.

The employee will need to provide care to a dependent with a long-term care need, however they will not need to provide any evidence to be eligible for this leave.

It will be at the employer’s discretion as to whether this statutory leave will be paid (there is no obligation for payment during carer’s leave), however it is important that any paid leave is fairly managed.

As a new addition to UK legislation, it is highly recommended that a policy is put in place for unpaid carers leave before or as soon after its introduction as possible.

Redundancy protection extended

As of 6 April 2024, new parents or expectant employees will have extended protection against redundancy meaning that these individuals will be entitled to suitable alternative employment over other individuals who are ‘at risk’.

This protection begins when the employee notifies their employer of the pregnancy/placement and will end 18 months following the birth/placement.

When looking at redundancies and planning, keep this in mind. Make sure you have updated records so can easily identify these employees.

Changes to TUPE consultation rules

Where a Transfer of Undertakings (Protection of Employment) (TUPE) is due to take place on or after 1 July 2024, companies with fewer than 50 UK employees will be able to enter into an individual consultation as opposed to the collective agreement process which was previously in place. The same now applies to a TUPE transfer of fewer than 10 employees where there is no existing employee representative in place.

You should keep this in mind now if you are looking at buying or selling a company or service. As part of the due diligence and planning, this change has now made the process simpler by removing the need to collectively consult.

Changes to harassment obligations

From 26th October 2024, new changes to The Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force, placing greater responsibilities on employers to prevent sexual harassment.

Compensation in a tribunal may be uplifted by as much as 25% where the employer has breached their duty to prevent harassment. The changes are designed to encourage employers to take a proactive approach to preventing sexual harassment in the workplace.

In advance of the introduction, employers should ensure that there are clear and robust policies and procedures in place around sexual harassment which are easily accessible to employees. Particular consideration should be made to the induction process and UK handbooks.

Regular training should also be undertaken on an annual basis. Some employers may wish to consider requesting that employees provide their signature to confirm that they understand and agree to your harassment prevention policy.

How ZEDRA can help

At ZEDRA, we have extensive experience supporting employers with HR, payroll and employee benefit matters across global markets. Our experts are skilled in advising employers on how to navigate the employment landscape efficiently and compliantly in the UK and beyond. Contact us to find out how we can help you.