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There are many new changes to employment laws set to come into place in 2020 that could affect a lot of businesses.

Some of the upcoming changes have been described on the Good Work Plan that was published on December 18th. We review the most important changes and updates:

Parental bereavement leave

The Parental Bereavement Leave and Pay Act 2018 has now been passed and is expected to come into force in April 2020.  The new act will allow workers to receive 2 weeks’ leave due to the loss of a child under 18 or a lost pregnancy after the 24th gestational week.

Employers allow employees unpaid bereavement leave but when this new bill the leave will be paid at the statutory rate if the employee has 26 weeks’ service and unpaid for other employees.

Holiday pay

From April 6th, 2020 holiday entitlement arrangements are going to improve for seasonal workers, the new calculation will change from 12 weeks of pay to calculate the average to 52 weeks of pay. Employers should make sure to keep records of employee pay for the 52 weeks prior to the 6th of April and after.

IR35 changes to the private sector

In was announced in the October Budget 2018 that the IR35 tax rules would be extended to the private sectors from April 2020. The rules are designed to reduce tax avoidance for off-payroll workers including contractors and personal service companies.

From April 2020, the IR35 rules will apply to private sector businesses with an annual turnover of over £10.2 million or of 50 or more employees.  With these changes, the HMRC is expecting to equalise taxes for employees vs. contractors who are doing the same work but paying different taxes.

Prepare for changes to the off-payroll working rules.

Tax on termination payments

HMRC will start taxing terminations payments over £30.000 from the 6th of April 2020. Employers will be required to tax termination payments for employees if the amount is more than £30.000.

Swedish derogation contracts are abolished.

The repeal of the Swedish derogation contracts or also known as pay between assignments contracts will come into effect from April 2020. Previously agency workers could agree to a contract which would remove their right to equal pay with permanent counterparts after 12 weeks working at the same assignment.

These contracts will no longer be allowed, and all agency workers will be entitled to the same rate of pay as their permanent counterparts after 12 weeks.

If you would like advice on how to prepare for these new employment laws please contact your local DMA Law office and our team will be able to help you.