December 3, 2018
From gender pay gap reporting to widespread claims of workplace sexual harassment, 2018 has been a busy year in employment law. Although employers may hope for a quieter 2019, it’s looking likely that there will be a number of issues that are prevalent throughout the year, amid the ongoing uncertainty of Brexit. Below are just ten changes employers need to look out for. Whilst there are sure to be other new developments introduced throughout next year, employers would do well to keep a close eye on these particular topics and put plans in place to ensure their business complies with any new requirements.
1. Increase in NMW rates
Having been announced as part of the 2018 Budget, both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase in April 2019. Under the new NLW, the minimum hourly rate that workers aged 25 and over are entitled to will increase from £7.83 to £8.21. At the same time, the NMW rate for workers aged between 21-24 will increase from £7.38 to £7.70 an hour; the rate for 18-20 year olds will increase from £5.90 to £6.15 an hour and those over compulsory school age but not yet 18 will experience an hourly increase from £4.20 to £4.35. The minimum rate for apprentices will also increase from £3.70 an hour to £3.90 an hour, providing the apprentice is under the age of 19, or 19 and over but in the first year of their current apprenticeship.
2. Settled Status for EU nationals
European workers currently living in the UK will be able to apply for settled status in 2019, allowing them to remain indefinitely in the UK following the end of the Brexit transition period in 2021. To be granted settled status individuals must be able to prove they have been living in the UK for 5 years by the date of application. Those who do not meet this requirement can apply for temporary status, allowing them to remain until they have accrued enough residency to be granted settled status.
3. Auto-enrolment contributions
From April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Currently, automatic enrolment requirements mean employers must contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively. Employers are reminded to allow appropriate time to consult with staff before making any changes to their pension contribution scheme.
Changes to the way employers issue payslips will also come into force on 6th April 2019 as from this date onwards the legal right to a payslip will be extended to include those who are recognised as ‘workers’. Employers will also be obliged to include the total number of hours worked on payslips for employees whose wages vary depending on how much time they have worked. It is important that employers work with their payroll departments to ensure the correct procedure is in place ahead of April’s deadline.
5. NMW for sleep-ins
Following 2018’s Court of Appeal decision on Mencap v Tomlinson Blake, a precedent was set that individuals working on sleep-in shifts, such as nurses and care workers, would not be entitled to national minimum wage (NMW) for time spent asleep in scenarios where they were ‘available for work’ and not ‘actually working’. A request to appeal this decision was lodged with the Supreme Court by Unison and a decision is expected in 2019 as to whether this case will be analysed further. Any ruling in 2019 will be important in defining the rights of thousands of staff currently working sleep-in shifts.
6. Gender Pay Gap Reporting
Private organisations with 250 or more employees will again be required to publish their gender pay gap figures on the 4th April 2019. Although employers will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in 2018 have been successful.
7. CEO pay gap reporting
New legislation will also come into force in 2019 that requires companies with more than 250 employees to publish their executive pay gap. Although the first reports are not expected until 2020 businesses should be calculating the necessary figures throughout 2019 to show the gap between the total amount paid to their CEO and the average pay for an employee.
8. Microchipping employees
If recent news stories are to be believed the act of micro-chipping employees may become more common in the UK workplace during 2019. The UK legal system has not yet been challenged in this regard, however it will be interesting to see how a court decides to rule on microchipping staff given the potential invasion of privacy and GDPR implications.
9. Non-disclosure agreement
The government have brought forward a review into the use of non-disclosure agreements in the workplace, with a response expected in 2019. These agreements, otherwise known as gagging clauses, were originally used to protect intellectual property when employees moved from one company to another. However, recent media coverage has highlighted the fact that they are often used to silence claims of harassment and bullying. Whilst these agreements remain legal, the government’s response may go some way to deciding how they can be used in the future.
10. Supermarket Equal Pay claims
At some time in 2019, we are expecting to receive decisions on separate tribunal cases on the issue of equal pay which involve Tesco, Asda, Morrisons and Sainsbury’s respectively. Leigh Day are representing the employees in each of these cases and are seeking compensation for predominately female shop workers who feel they are unfairly paid less than predominately male warehouse staff, despite carrying out a similar role. This will provide more clarity on the issue of equal pay and, depending on the result, may pave the way for further claims from staff working in other sectors
Alan Price is senior director for law consultancy, Peninsula; managing director of Peninsula Ireland and Elected Director & Trustee for the Chartered Institute of Personnel and Development – CIPD. Alan Price also sat for four years as a board director at The Chambers of Commerce Ireland and on their audit committee. Alan is a Chartered Fellow of the CIPD.