The government has confirmed it will raise the National Insurance threshold to £9,500 in 2020.
The National Living Wage has also been increased by 6.2%. The new rates are below.
Further to the announcement of the most recent Budget in 2019, the new National Minimum/Living Wage will increase from 1st April 2020, as follows:
- Workers aged 25 and over – £8.72 an hour (National Living Wage)
- Workers aged 21-24 – £8.20 an hour
- Workers aged 18-20 – £6.45 an hour
- Young workers aged 16-17 – £4.55 an hour
- Apprentice rate (workers under 19 or in first year of apprenticeship) – £4.15 an hour.
The following statutory pay rates have also been proposed for 2020, and are usually effective from 6th April:
- Statutory Sick Pay – rises from £94.25 to £95.85 per week
- Statutory Maternity Pay – rises from £148.68 to £151.20 per week
- Statutory Paternity Pay – rises from £148.68 to £151.20 per week
- Statutory Adoption Pay – rises from £148.68 to £151.20 per week
- Shared Parental Pay – rises from £148.68 to £151.20 per week
NICs payable on termination payments over £30k
On 6th April 2020, employer National Insurance Contributions (NICs) will be payable on termination payments over £30,000.
Other pay and employment legislation changes in the pipeline
As part of the Industrial Strategy, the Prime Minister commissioned the independent Matthew Taylor Review of Modern Working Practices to ensure that the UK labour market can adapt to the changes while protecting workers’ rights in the UK. Following this review, the government responded by publishing its Good Work Plan in December 2018, accepting the vast majority of the recommendations made by Matthew Taylor. Some legislation has already been passed with some key changes from April 2020:
- Parental Bereavement Leave and Pay
- Changes to holiday pay calculations
- Changes to written statements of employment particulars
- Changes to agency workers’ rights
- IR35 – changes to the tax treatment of off-payroll labour
- Changes to ICE (Information and Consultation of Employees) Regulations.
In the Queen’s speech there were about 40 new laws announced that are due to be brought in over the coming months! Perhaps one of the most significant is a new Employment Bill to enhance workers’ rights, support flexible working, extend unpaid carers’ leave entitlement and ensure workers keep their tips. Some of the key aspects of the Employment Bill include:
- The right for workers to request a more stable contract
- Extended redundancy protections to prevent pregnancy and maternity discrimination
- Extended leave for neonatal care
- One weeks’ additional leave for unpaid carers
- The creation of a new single enforcement body to protect workers’ rights
- The right for workers to keep their tips in full
- Flexible working by default, unless employers have a good reason not to allow this (subject to consultation).
Executive Pay Reporting
The first disclosures of the Government’s new executive pay ratio regulations which came force in January 2019 are due from the start of 2020. The pay ratio regulations make it a statutory requirement for UK listed companies with more than 250 employees to disclose annually the ratio of their CEO’s pay to the median, lower quartile and upper quartile pay of their UK employees for pay awarded in 2019.
A new Immigration and Social Security Co-ordination (EU Withdrawal) Bill is proposed to bring and end to free movement in UK law and adopt a new points-based immigration system from 2021. EU Citizens arriving from 2021 will therefore be subject to the same UK immigration controls as a non-EU citizen. The aim is also to protect the immigration status of Irish citizens.
If you would like support with your payroll, or with implementing any of these changes, please call HR Solutions on 0844 3245840 or visit www.hrsolutions-uk.com/hr-services for more information.