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.
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
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
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
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.
(April 2018 –
(1 April 2020)
18 – 20
21 – 24
25 and over
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.