Updates: The UK government’s Coronavirus Job Retention Scheme (CJRS) has been revised and amended throughout the crisis, and will be phased out and will close on 31 October 2020. For more details, please refer to our July 31, 2020, alert. The most recent guidance from the UK government’s COVID-19 Recovery Strategy, addressing the return of employees to work, is covered in our July 24 alert.
Partly in response to the economic repercussions of the COVID-19 pandemic, employment law in the UK has undergone a number of changes in recent months. Below is a compilation of these changes, current as of April 2020, and what businesses must do to comply.
COVID-19-Related Changes
The Coronavirus Job Retention Scheme (JRS)
Details on the JRS, introduced by the Coronavirus Act 2020, and further guidance are provided in an April 1 McGuireWoods alert.
The Self-Employment Income Support Scheme (SEISS)
Details on the SEISS to date are available in this April 2 McGuireWoods alert. Further guidance on SEISS is expected soon.
Changes to Statutory Sick Pay (SSP)
In response to COVID-19, the UK government introduced the Statutory Sick Pay (General) (Coronavirus Amendment) (Suspension of Waiting Days and General Amendment) Regulations 2020. SSP will now be payable, on a temporary basis, from day one of sick leave, whereas before, an employee would need to be off sick for three “waiting” days in order to qualify for SSP on the fourth day of sick leave. SSP will be payable to those who are not sick but have been advised to self-isolate in accordance with government guidance. Workers who are not eligible for SSP can now more easily make a claim for universal credit or contributory employment and support allowance.
Emergency Volunteering Scheme
The Coronavirus Act 2020 will also enable employees and workers to take emergency volunteer leave (EVL) in blocks of two, three or four weeks’ statutory unpaid leave in any period of 16 weeks. The UK government will establish a UK-wide fund to compensate for loss of earnings and expenses incurred at a flat rate for those who volunteer through an appropriate authority. To take EVL, workers must give their employers three working days’ notice and each must obtain a certificate from an appropriate authority. Employers with less than 10 people are exempt from granting EVL. Further details on EVL are expected soon.
COVID-19: Carry-Over of Annual Leave
The UK government has announced that, due to COVID-19, the Working Time Regulations 1998 will be relaxed, by introducing the Working Time (Coronavirus) (Amendment) Regulations 2020 to enable workers who have not taken all of their statutory annual leave entitlement to be able to carry it over into the next two leave years.
Changes to Off-Payroll Working (IR35)
Proposed changes to tax rules in relation to workers engaged through an intermediary such as a personal service company were due to be effective from 6 April 2020. However, the UK government has postponed implementation until 6 April 2021 to ease the burden on businesses in light of COVID-19 and, accordingly, liability for incorrectly assessed tax status will fall away. However, employers still must be preparing to assess their workers’ status to avoid liability. It is expected that the 12 months’ “soft landing” in terms of penalties for incorrect assessments will be withdrawn in respect of the new deadline in 2021.
Gender Pay Gap Reporting
To ease the administrative burden following COVID-19, the third-year gender pay gap reporting obligation has now fallen away for 2019 – 2020 and is postponed until 6 April 2021. Companies with 250 employees or more are required to report on, among other pay gap indicators, the differences in mean and median hourly rates of pay and bonus pay for male and female employees. If companies have already compiled their reports, it is a commercial decision to go ahead with publication, although companies will not be penalised for not doing so.
Other Employment-Related Updates
Changes to Section 1 (Employment Rights Act 1996) Statements of Particulars
In advance of the 6 April 2020 deadline, businesses have been revising their pro forma contracts of employment to include certain additional information to be provided to employees and now also workers, including details on all paid leave, such as parental leave, any probationary period and any training required to be undertaken on the job. These “section 1” details must be provided to employees and workers from day one of their employment or engagement, whereas previously it was within two months. Failure to do so may result in an uplift in a compensation claim by an employee awarded at an Employment Tribunal, capped at four weeks’ basic pay, up to £2,100.
Parental Bereavement Leave
From 6 April 2020, there is a new statutory right for bereaved parents to take two weeks’ paid leave in the event of the death of a child under 18 or still birth after 24 weeks’ of pregnancy. The leave is paid at a current rate of £148.68 per week or 90 percent of average weekly earnings if this is lower.
Improved Rights for Agency Workers
The “Swedish Derogation,” the provision which exempts agency workers from the right to secure equal pay with permanent employees once they complete 12 weeks’ service, falls away from 6 April 2020. Agencies must now notify agency workers of their right to the same pay and conditions as permanent employees of their clients and provide them with a “Key Facts Statement” outlining those conditions before any proposed placement.
Changes to Holiday Pay Calculation
The reference period used to calculate holiday pay for workers with variable hours will change from 6 April 2020. In respect of those workers, the reference period will increase from 12 weeks to 52 weeks, or, if less, the number of complete weeks that the worker has worked. As before, employers must review the reference period the employee has worked to calculate average pay, to then determine holiday pay.
National Minimum Wage (NMW)
The NMW increased from 1 April 2020, as outlined below.
| Age | Previous rate (April 2018 – April 2019) | New rate (1 April 2020) |
| Apprentices | £3.90 | £4.15 |
| Under 18 | £4.35 | £4.55 |
| 18 – 20 | £6.15 | £6.45 |
| 21 – 24 | £7.70 | £8.20 |
| 25 and over | £8.21 | £8.72 |
Tax on Termination Payments
Employer Class 1A National Insurance contributions (NICs) will become payable on termination payments above £30,000, whereas before such payments in excess of this threshold were subject only to income tax. The exemption for employee NICs remains applicable for termination payments.
Consultation Threshold Under the Information and Consultation of Employees Regulations 2004 (ICE)
Before 6 April 2020, employees of a business employing 50 or more people who want to trigger an information and consultation request to set up, or make changes to, existing arrangements to inform and consult them in respect of issues relating to the organisation, would need at least 10 percent of employees to support such a request (or 15 employees, whichever is the greater). The threshold to request an information and consultation agreement under the ICE will be lowered from 10 percent to 2 percent, subject to a minimum of 15 employees, from 6 April 2020.
Tribunal Awards and Revised Statutory Limits
- The SSP rate increased from £94.25 to £95.85 a week (up to 28 weeks).
- A week’s gross pay cap increased from £525 to £538, for the purposes of calculating redundancy payments, etc.
- The maximum basic award and statutory redundancy payments increased from £15,750 to £16,140.
- The maximum compensatory award increased from £86,444 to £88,519.
- The statutory rate of maternity, paternity, adoption and shared parental pay increased from £148.68 to £151.20.
Changes to the “Vento Bands”
An injury to feelings award can be given to claimants in discrimination and certain whistleblowing claims. The level of any such award is assessed by reference to guidelines known as the “Vento bands.”
From 6 April 2019, the “upper band” (previously £25,700 to £42,900) will now be £26,300 to £44,000 for the most serious cases. The middle band range for less serious cases will now be between £8,800 and £26,300, while the level of compensation awarded in even less serious cases (previously £8,600) will range from £900 to £8,800. Any award over £44,000 will be made in only the most egregious cases.
McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.