Important Payroll & HR Legislation Changes from April 2024
April 2024 brings significant updates to payroll and HR legislation that employers and employees need to be aware of. Here’s a comprehensive overview of the changes and how they might affect you. For further information or to discuss how these changes might impact you or your business, please contact our Payroll linda@riverviewportfolio.co.uk for assistance any Payroll and/or HR inquiries.
National Living Wage (NLW) and National Minimum Wage (NMW)
Annual increases to the NLW and NMW now take effect from 1st April each year. One notable change this year is the adjustment in age bandings for the NLW. From 1st April 2024, the NLW will apply to workers aged 21 and above, instead of the previous threshold of 23. Consequently, the NMW will now cover individuals aged under 18 (above compulsory school leaving age) up to age 20.
The new hourly rates are as follows:
- Workers aged 21 and above (NLW): £11.44
- Workers aged 18-20 inclusive: £8.60
- Young workers under 18 (no longer in compulsory school): £6.40
- Apprentices (those under 19 or 19+ in the first year of an approved apprenticeship): £6.40
These changes have already been implemented in payroll systems to ensure compliance.
Automatic Enrolment Workplace Pension Schemes
Pension contribution rates remain unchanged:
- Employee contribution: 5% (with tax relief, the effective contribution is 4%)
- Employer contribution: 3%
However, the government is planning to introduce legislation in 2024 to lower the minimum age for auto-enrolment to 18. Additionally, there are proposals to remove or reduce the lower earnings limit for pension contribution calculations.
Changes to Holiday Entitlement and Pay
For holiday years starting on or after 1st April 2024, part-year and irregular hours workers will accrue holiday based on 12.07% of the hours worked in the pay period. Employers have a choice in how to pay holiday pay to these workers: it can either be paid when the holiday is taken, or it can be ‘rolled up’ and included in each pay packet. If the latter method is chosen, pay must be uplifted by 12.07% for every hour worked, and this must be clearly identified on the payslip.
Regarding the carry-over of annual leave, the following provisions apply:
- Up to 5.6 weeks can be carried over if leave could not be taken due to family-related leave such as maternity or adoption leave.
- Up to 4 weeks can be carried over where leave could not be taken due to sickness, with a maximum carry-over period of 18 months.
- Up to 4 weeks can be carried over if the employer fails to recognize the worker’s right to take leave or fails to provide a reasonable opportunity to take it.
The special provision allowing workers to carry over holiday for up to 2 years, introduced during the Covid-19 pandemic, ended on 31st March 2024.
For calculating holiday pay, ‘normal pay’ will include regular overtime, commission payments linked to contractual tasks, status-based payments such as those for length of service or seniority, and other consistent earnings.
Flexible Working
From 6th April 2024, the right to request flexible working becomes a day-one employment right. Employers now have 2 months (down from 3) to address such requests. Additionally, employees can make up to 2 flexible working requests within a 12-month period. If a request is refused, there must be a consultation with the employee.
Carer’s Leave
Effective 6th April 2024, Carer’s Leave will become a day-one employment right, allowing employees up to 1 week of unpaid leave per year without needing to provide evidence of eligibility. Employers may choose to offer this as paid leave.
Redundancy and Family-Friendly Rights
From 6th April 2024, enhanced protection against redundancy is provided for pregnant employees and extends up to 18 months post-birth. This protection also applies to adoption leave and shared parental leave.
Paternity Leave
Changes effective from 6th April 2024 will make paternity leave more flexible. Employees can now take paternity leave as one block of 2 weeks or as two non-consecutive blocks of 1 week, available up to the end of the first year after birth or adoption.
TUPE Changes
From 1st July 2024, businesses with fewer than 50 employees will be able to consult directly with employees regarding transfers. This also applies to businesses of any size when transferring fewer than 10 employees, provided there are no existing employee representatives.
Tipping/Gratuities
Legislation effective from 1st July 2024 will ban employers from keeping tips or gratuities intended for employees. Tips must be allocated fairly, and a new tribunal claim will be available for employees if tips are not fairly distributed.
Harassment
Starting October 2024, employers will have a new duty to take proactive steps to prevent sexual harassment in the workplace. Employment Tribunals will have the authority to uplift compensation where employers breach this duty.
Stable and Predictable Contracts
New legislation, expected to come into force in Autumn 2024, will give workers with unpredictable hours or fixed-term contracts the right to request a more stable working pattern. Details on the service requirements are forthcoming (expected Autumn of 2024).
Further Changes Expected
Additional legislative changes anticipated in 2024 include:
- Neonatal Care Leave
- Restrictions on Non-Compete Clauses
- A new Code of Practice for “Fire and Rehire”
- Simplified Data Protection rules
- Minimum service levels during strikes in health, education, and transport sectors.
Stay informed to ensure compliance and optimise your Payroll and HR workplace practices, and please do contact us for any support.
