Employment legislation and working practices exist in constant conversation, and the reality is that the world of work has changed significantly in recent years. Whether talking about ongoing workplace shifts following the COVID-19 pandemic or the challenges in hiring and training that have endured for businesses, these policies reflect the demands of workers and the need to build a competitive employee experience.
New rules in effect from April 2024 and changes from the recent Spring Budget mean now is a key time to review your HR policies and practices. Staying informed not only ensures compliance but positions your business as an attractive place to work in an increasingly competitive talent market.
Here, Haines Watts Bristol People Manager Emily Dawe-Lane explains the latest shifts in employment policy and what they can show owner-managers about the changing job market.
What are the most recent changes?
Recent changes in the budget have introduced significant legislative updates affecting employment standards, particularly concerning pay and employee rights, reflecting the changing demands of the UK workforce.
National Living Wage (NLW) Adjustments
The National Living Wage has seen updates come into effect, following on from the 9.8% increase from last year’s budget, in place from 1 April 2024, along with rises for apprentices.
This can be an easy trap for employers to fall into if their employees or apprentices age into a new bracket during this time.
- For example, any apprentices who have completed one year of their apprenticeship and are over 19 must now be considered in the 18-20 pay range.
- The upper band has also been expanded to include 21 years and over for the first time.
For those on minimum wage, employers should be cautious with employees asked to arrive early (e.g., 15 minutes before their shift) as this could risk their pay falling below the minimum wage when this time is added. It’s advisable to set wages slightly above the minimum to avoid such issues.
Holiday Pay Rules
The calculation of holiday entitlement has been revised for part-year and irregular-hours workers:
- Holiday Pay for Part-Year and Irregular-Hours Workers: The entitlement for these employees now uses the 12.07% rule, aligning with the recent Harpur Trust v Brazel case decision. Employers must calculate holiday pay based on average hours worked per week in the previous pay period.
- Payslip Requirements for Part-Year and Irregular-Hours Workers: Holiday pay calculations must now be separately stated on payslips to ensure transparency.
This must be applied to any leave years after 1st April 2024 – meaning anyone who has a January – December year can wait until January 2025 to make these changes, but it would be advisable to do it in advance.
Flexible Working Rights
Flexible working has been significantly reformed:
- Day-One Right: Employees can now request flexible working arrangements from the first day of employment, with the opportunity to make two requests within a 12-month period.
- Employer Consultation: Employers are required to consult with the employee before refusing a request and must respond within two months.
Enhanced Family Leave Rights
There have been several enhancements to family-related leave:
- Paternity Leave: Paternity leave can now be taken in one or two blocks within 52 weeks of birth/adoption, offering greater flexibility.
- Maternity, Adoption, and Shared Parental Leave: These rights now include enhanced redundancy protection during pregnancy and up to 18 months post-birth/adoption, while the statutory pay has been proposed at £184.03 per week.
Sick and Carers Leave
Employees are now entitled to one week of unpaid carers leave per year, acknowledging the need to support dependents (does not have to be a family member). They can request to take this as a whole week or individual days throughout the year.
What changes should owner-managers consider?
Keeping up with HR legislation isn’t just a matter of ticking compliance boxes – it’s also a factor in how companies compete on and benchmark their employee experiences. In a period where competition for talent remains high, simply doing the minimum to stay compliant may well not be enough to attract and retain the best employees.
Embrace Flexible Working
The new right to request flexible arrangements from day one makes it vital to update your policies accordingly. Consider investing in technology and tools that facilitate remote or hybrid working arrangements.
In addition, this may be a matter of shifting your mindset when writing job roles and evaluating performance. Focus on the outcomes you need employees to achieve rather than simply tracking hours spent in the office.
Proactive Compliance and Protection
Employee safety and diversity remains a major issue. With increased scrutiny on this issue, employers are being pushed to update sexual harassment policies and implement mandatory training for everyone. Proactively demonstrating your commitment to a safe workplace environment not only ensures compliance but also protects you as the owner-manager.
Attract and Retain Talent
Maternity, paternity, and shared parental leave enhancements mean other businesses may offer more generous packages. Review your policies and consider going beyond the legal minimum to keep valued team members and position your company as an employer of choice.
Managing Complex Roles and Responsibilities
When employees go on extended leave (not for sickness), consider redistributing their duties as temporary promotions to other team members. This can motivate your existing workforce and provide development opportunities. Likewise, if a parent returns part-time after leave, job shares or other flexible solutions could be a good fit.
How to find support
Among the many hats owner-managers have to wear, running HR can seem like one of the less business-critical areas, compared to, say, sales. But in a competitive hiring market, talent can be the difference between growth and falling behind.
