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New Year, new laws

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Employee rights

A number of new laws come into force in the coming months regarding staff pay and conditions. Make sure you understand them and how they will affect your business

Each year the national minimum wage goes up, but come April 1st we’re set to see the largest ever cash increase. On top of this, it is being extended to include 21 and 22 year olds, bringing thousands more workers into this category. 

The new rates you will need to pay your staff as of 1st April are:

For those aged 21 and over: 

£11.44 per hour – up 9.8% from £10.42. An increase of £1.02.

For those aged 18-20: 

£8.60 per hour – up 14.8% from £7.49. An increase of £1.11.

For those ages 16-17 and apprentices: 

£6.40 an hour – up 21.2% from £5.28. An increase of £1.12.

You will need to make sure you pay your staff the correct wage otherwise you risk not only claims from workers, but you could land a hefty fine and find yourself on the government’s name and shame list.

Holiday pay and leave

There will be two key changes that will affect how holiday entitlement is calculated for irregular hours workers and part-year workers for leave years beginning on or after 1st April 2024. 

The first is a new accrual method for these workers, calculated as 12.07% of actual hours worked in a pay period. The 12.07% figure is based on the fact that all workers are entitled to 5.6 weeks’ leave. To find out more, use the government’s holiday entitlement calculator at: https://www.gov.uk/calculate-your-holiday-entitlement

The second change is the right for employers, if they wish to use it, to implement rolled-up holiday pay. This means that holiday pay for these workers can be paid as an uplift of 12.07% to the normal rate of pay at the time work is done, instead of being paid at the time the holiday is taken.

The key is identifying the workers that will fall under these new rules. 

Flexible working

The Flexible Working (Amendment) Regulations 2023 will come into force on 6th April 2024, removing the existing 26-week minimum period of service for employees to make a request for flexible working. It will become a ‘day one’ right with effect from 6th April 2024.

Changes to the current statutory right to request flexible working are also expected to take effect from this date. This includes employees being able to make two flexible working requests (up from just one) in any 12-month period and, secondly, they will no longer be required to explain the effects of the proposed change on your business. 

Additionally, you will be required to respond to a request within two months rather than three months as currently applies.

Ban on withholding tips

The Employment (Allocation of Tips) Act 2023, passed in early 2023, comes into effect in July, which means businesses will not be able to keep any money staff receive as tips. The government predicts this will ensure around £200 million a year goes back to hospitality employees.

You will need to have a clear written policy that details how qualifying tips will be fairly allocated to staff. The policy should be easily accessed by staff and should include procedures for resolving issues raised by individuals. In addition, you will be required to keep a record of tips and how they were allocated. These records should be maintained for at least three years and be made available to staff within four weeks of receiving a request.

It is always best to seek expert advice to help review your procedures and set up new ones if necessary. 

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