Important new changes to employment regulations from 6 April 2020, are being described as the biggest change to employment laws in a generation.

The raft of new legislation is designed to both increase transparency and strengthen the rights of workers in ‘unsecure’ employment.

But how will the changes affect businesses and, in particular, how you deal with payroll?

To help you get to grips with the key changes, here is a brief rundown of how the new Good Work Plan will affect employers’ practices:

Statement of Main Terms (SMT)

This document includes an employee’s key terms of employment including pay and annual leave entitlement Previously, employers had two months to provide it to a new employee but this grace period is being removed, meaning the SMT must be given to an employee on day one of employment.

In addition, more details will have to be included in the SMT, as follows:

  • Duration of and conditions attached to any probationary period
  • All paid leave entitlements
  • All benefits the employee receives
  • An employee’s training entitlement
  • The days of the week the employee is required to work on and whether normal working hours are variable or not. If they are variable, information must be included on how they vary or what determines the variation

Significantly, employers will have to provide an SMT to their ‘workers’, as well as their employees. Previously, only employees were entitled to receive this document, but workers including zero hours workers and casual workers are also being brought within scope.

Consultation rights: new legislation will reduce the threshold required to set up information and consultation arrangements from 10 per cent to just two per cent of employees. The minimum 15 employee threshold will remain the same, however.

Redundancy protection: the Government will extend the redundancy protection period for pregnant women from the point the employee informs the employer she is pregnant and six months after a mother has returned to work. Extended protection periods will also apply to those taking adoption leave.

Holiday pay: the holiday pay reference period will increase to 52 weeks. This will impact on seasonal and flexible workers.

Contracts: workers will gain the right to request a more predictable and stable contract after 26 weeks of employment.

Agency workers: an agency worker will be entitled to receive the same level of pay as a permanent worker after 12 weeks of service.

Tips and gratuities: tips must be passed on directly to the worker, rather than taken by the employer.

Compensation: employers who do not pay compensation awarded by an Employment Tribunal will face additional fines, as well as the prospect of “naming and shaming”.