Employment Law

Employers who flout their automatic enrolment pension duties are being targeted with short-notice inspections by The Pensions Regulator (TPR). TPR is using data to pinpoint specific employers across the UK who are suspected of breaking the law, including those who fail to put staff into a pension scheme or who make no, or incorrect, pension contributions.

It is mandatory for employers to take part in the inspections – obstruction of an inspector and failing to provide information when required to do so are criminal offences. Non-compliance could also result in fines or court action.

The inspections will continue over the summer across the UK. Previous rounds of spot checks targeted employers by region, from at-risk business sectors and from random test samples – as well as employers where there was evidence of non-compliance. TPR will also be directly contacting other employers suspected of non-compliance by phone to validate the information held related to them meeting their duties, to ensure they are complying fully.

The Information Commissioner's Office (ICO) has launched a new "Be Data Aware" campaign to help people understand how organisations might be using their personal data to target them online and why, and how people can control who is targeting them. This includes, understanding how organisations use people’s data to reach them with social media adverts to market their goods or services and for political marketing.

One of the recommendations from the ICO's investigation into the use of data analytics for political purposes, was to continue to educate the public on the impact of new and developing technologies and on the use of data analytics in political campaigns. The Be Data Aware campaign is intended to do just that.

The campaign includes a number of resources, such as downloadable factsheets on social media privacy settings (with individual fact sheets available covering each of the main social media websites, e.g. Facebook, Twitter and LinkedIn), how online microtargeting works and political campaigning practices.

A new report from the Low Pay Commission (LPC) has found that the number of workers paid less than the statutory minimum wage in the UK increased in 2018. In April 2018, 439,000 workers were paid less than the hourly minimum wage rate they were entitled to. Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW). This is an increase of around 30,000 on the previous year’s level of underpayment of the NLW, or a two percentage point rise in the share of workers entitled to that rate.

The report also found that women are more likely than men to be paid less than the minimum wage, and underpayment is higher for the youngest and oldest workers. The largest numbers of underpaid workers work in hospitality, retail, cleaning and maintenance, with childcare being the occupation with the highest proportion of underpaid workers.

The LPC has recommended that the government continues to invest strongly in communications to both workers and employers around minimum wage compliance and enforcement. 

Acas has published new general guidance to assist employers and employees in understanding the impact that Brexit may have in their workplace and it gives advice regarding the steps they may want to take before the UK leaves the EU. 

It advises that EU membership can impact workplaces in several ways, such as:

• providing goods and services to other members of the EU
• using goods and services provided by other members of the EU
• employing EU citizens
• having UK employees work in the EU.

Many UK employment rights also come from EU directives and court decisions about some employment disputes can be made in the EU courts.

The new guidance explains the potential changes to employment law as a result of the UK leaving the EU and it provides links to the government’s technical guidance. It also explains the impact of Brexit on EU citizens working in the UK and it again provides links to government guidance on their rights. Finally, it offers advice to employers when talking to their staff about how they may be affected by Brexit.

The government has published new guidance which confirms that, once the UK leaves the EU and whether this is with a deal or not, there will be no change to the way EU, EEA and Swiss citizens prove their right to work until 1 January 2021. Irish citizens will continue to have the right to work in the UK and prove their right to work as they do now, for example by using their passport.

This means that:

• employers should continue to conduct right to work checks on all prospective employees, regardless of their nationality, to establish the statutory excuse against payment of a civil penalty for employing illegal workers


• when carrying out such checks, employers will not need to distinguish between EU, EEA and Swiss citizens and their family members who were resident in the UK before or after the UK leaves the EU


• until 1 January 2021, EU, EEA and Swiss citizens will continue to be able to prove their right to work in the UK as they do now, for example by showing a passport or national identity card. Alternatively, they may choose to use the Home Office online checking service if they have been granted status under the EU Settlement Scheme, but employers cannot require them to do so. Employers can view the prospective employee’s status through the Home Office online checking service once the individual has provided their date of birth and unique share code


• employers do not have to check whether existing employees have been granted status under the EU Settlement Scheme


• as is currently the case, in order for an employer to establish the statutory excuse when employing the non-EU, EEA or Swiss family member of an EU, EEA or Swiss citizen, the prospective employee will need to show Home Office issued documentation. They may choose to use the Home Office online checking service if they hold a biometric residence card or have been granted status under the EU Settlement Scheme.

From 1 January 2021, new guidance will apply for right to work checks and this will be issued by the government in due course.

• The National Minimum Wage (NMW) and National Living Wage (NLW) rates will increase from 1 April 2019. The NLW for workers aged 25 or over will increase to £8.21 per hour, the NMW standard rate for workers aged 21 to 24 will increase to £7.70 per hour, the NMW development rate for workers aged 18 to 20 will increase to £6.15 per hour, the NMW young workers rate for those aged 16 and 17 will increase to £4.35 per hour and the NMW apprentice rate will increase to £3.90 per hour. 

 

• The standard weekly rates of statutory maternity, adoption, paternity and shared parental pay will increase from £145.18 to £148.68 from 7 April 2019 and it will also increase the weekly rate of statutory sick pay from £92.05 to £94.25 from 6 April 2019. The earnings threshold, below which employees are not entitled to these statutory payments, will increase from £116 to £118 per week from 6 April 2019. 

 

• Also to be increased will be the maximum amount of a “week’s pay” from £508 to £525 from 6 April 2019. A week’s pay is used to calculate statutory redundancy payments, the unfair dismissal basic and additional awards and payments to employees in the event of insolvency. From the same date, the limit on the unfair dismissal compensatory award also increases from £83,682 to £86,444 and it increases the limit on the daily amount of statutory guarantee pay from £28 to £29.

 

• The earnings trigger, which determines when an eligible worker is entitled to be automatically enrolled into a workplace pension scheme, freezes at £10,000 from 6 April 2019. It also continues to align the qualifying earnings band with National Insurance contributions from 6 April 2019, so the lower limit of the band will increase from £6,032 to £6,136 and the upper limit will increase from £46,350 to £50,000. The qualifying earnings band is used to calculate contributions. In addition, the employer’s minimum contribution to a workplace pension scheme will increase from 2% to 3% from 6 April 2019 and the worker’s minimum contribution will increase from 3% to 5% from 6 April 2019.

 

• From 6 April 2019 all workers (not just employees) will have the right to be provided with an itemised pay statement at or before the time at which any payment of wages is made to them. In addition, where the amount of wages the employee/worker receives varies by reference to time worked, the pay statement must contain information regarding the total number of hours worked by them for which they are being paid, either as a single aggregate figure or as separate figures for different types of work or different rates of pay. These provisions apply in respect of pay periods that begin on or after 6 April 2019.

 

• The maximum financial penalty that can be imposed on an employer for an aggravated breach of employment law fincreases rom £5,000 to £20,000 from 6 April 2019.

 

Finally, eligible EU, EEA and Swiss citizens living in the UK are now able to apply for settled or pre-settled status under the EU Settlement Scheme, following the scheme’s full launch on 30 March 2019.

There are special rules that need to be taken into account if you employ an au pair in your home. This is because au pairs are not usually considered as workers or employees and are not entitled to the National Minimum Wage or paid holidays.

An au pair is effectively treated as a member of the family they live with and receive 'pocket money' instead of salary. The au pair may be liable to Income Tax and National Insurance if the amount of ‘pocket money’ they receive is high enough.

HMRC’s guidance states that an au pair isn’t classed as a worker or an employee if most of the following apply:

• they’re an EU citizen or have entered the UK on a Youth Mobility visa or student visa
• they’re here on a cultural exchange programme
• they’ve got a signed letter of invitation from the host family that includes details of their stay, for example accommodation, living conditions, approximate working hours, free time, pocket money
• they learn about British culture from the host family and share their own culture with them
• they have their own private room in the house, provided free of charge
• they eat their main meals with the host family, free of charge
• they help with light housework and childcare for around 30 hours a week, including a couple of evenings babysitting
• they get reasonable pocket money
• they can attend English language classes at a local college in their spare time
• they’re allowed time to study and can practise their English with the host family
• they sometimes go on holiday with the host family and help look after the children
• they can travel home to see their family during the year

If you employ someone else to work in your home, you need to ensure that you provide them with their employee rights and deduct the correct amount of tax from their salary. The type of employees you may have in your home could for example be a nanny, housekeeper, gardener or carer. The rules are different if the person working in your home is self-employed or paid through an agency.

The government has launched its first holiday pay advertising campaign aimed at encouraging workers to understand their rights and employers to understand their legal obligations in relation to holiday pay. It estimates that, in the UK, 1.8 million workers are not receiving the holiday pay they are entitled to, resulting in them missing out on an estimated £1.8 billion each year.

The campaign, which has the slogan “Holiday pay – it comes with the job”, aims to reach workers and employers through video on demand, Spotify advertising, and digital website and social media advertising, as well as adverts in train stations and on the roadside.

The Employment Rights (Increase of Limits) Order 2019 has been laid before Parliament and will come into force from 6 April 2019. The Order increases the limits applying to certain awards of employment tribunals and to other amounts payable under employment legislation. The main changes are:

• Maximum amount of a “week’s pay” which is used for the purposes of calculating statutory redundancy payments, the unfair dismissal basic or additional award and payments to employees in the event of insolvency – increases from £508 to £525.
• Limit on the amount of the unfair dismissal compensatory award – increases from £83,682 to £86,444 (there is an additional cap of one year’s gross salary on the unfair dismissal compensatory award).
• Limit on the daily amount of statutory guarantee payment – increases from £28.00 to £29.00.

The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2019. The appropriate date is determined differently depending on the type of claim brought. In unfair dismissal claims, this date is the effective date of termination of employment. Where the appropriate date falls before 6 April 2019, the old limits will continue to apply.

The increases reflect an increase of 3.3% in the retail prices index from September 2017 to September 2018.

The Order does not apply to Northern Ireland, which sets its own increases.

The government has launched a consultation seeking views on new proposals to extend redundancy protection for pregnant women and new parents.

As the law currently stands, employees who are placed at risk of redundancy when they are absent on maternity, adoption or shared parental leave have an absolute right to be offered a suitable alternative vacancy (where one is available) in priority to other employees who are also at risk of redundancy. They do not need to apply for the vacancy, nor must they undertake a competitive interview process. However, this protection does not apply to pregnant employees who have not yet started their maternity leave, nor does it apply to employees who have recently returned to work from maternity, adoption or shared parental leave. It’s important to bear in mind though that the current protection is not a right not to be made redundant; an employee on maternity, adoption or shared parental leave can still be made redundant. Rather, it’s a statutory right to be offered any available suitable alternative vacancy during the redundancy process in priority to other “at risk” employees.

The consultation proposes to extend the current protection to cover both women who have notified their employers in writing that they are pregnant and new mothers who have returned to work from maternity leave in the previous six months. It also seeks views on extending the same six-month protection to new parents (including men) returning to work from adoption leave, shared parental leave and longer periods of unpaid parental leave. Finally, the consultation commits to exploring the evidence for increasing the three-month time limit within which an employment tribunal claim of discrimination, harassment or victimisation (including on grounds of pregnancy and maternity) can ordinarily be brought.

Government research has found that one in nine women said they had been dismissed or made redundant when they returned to work after having a baby, or they were treated so badly they felt forced out of their job. The same research estimates 54,000 women a year lose their jobs due to pregnancy or maternity.

The consultation closes on 5 April 2019.