What Does the Good Work Plan Mean for Your Payroll?

May29

Posted in Payroll

The Government’s Good Work Plan has gone live, with implications for employers and payroll providers across the UK. So if you haven’t made changes yet, what do you need to do?

It’s hard not to see The Government’s Good Work Plan as an attempt to head off Jeremy Corbyn’s calls for protected worker rights as we exited the EU on 29 March. Of course, we didn’t leave the EU on 29 March (you may have noticed) but the Good Work Plan remains, and parts of it are now in place.

Somewhat confusingly, however, some parts of it won’t come into force until next year, and some bits have yet to be drafted. So, if you’re concerned that your payroll needs to make changes to be compliant, here’s the current state of play:

Already in force

From 6 April 2019, all workers are now entitled to a payslip, which must include hours worked for hourly-paid workers and employees, making it easier for workers to check that they are being paid for the right hours at the right rate.

If you outsource your payroll, those changes should have already been made. If you handle payroll in house, it’s worth checking to ensure your payroll team are following the law.

Of less immediate impact (although potentially significant) are April changes that saw penalties for aggravated breaches rise to £20,000. And as of December 2018 employers who fail to pay employment tribunal awards can now be now named and shamed by the Government.

Coming soon

The real weight of the Good Work Plan will be felt in April 2020, when the following come into force:

  • The reference period for calculating a week’s pay for holiday purposes will change from 12 to 52 weeks (to protect seasonal workers).
  • Workers and agency workers will be entitled to a ‘statement of written particulars’ or key facts document from day one, giving them essential details about their employment and clarity over pay. The intention is to bring an end to any worker starting with an employer or agency and not knowing what to expect from their wage.
  • Around 120,000 agency workers will benefit from the end of the ‘Swedish derogation’, a loophole which effectively enabled agency staff to be paid less than permanent workers. From April 2020, all workers will be entitled to the same pay rates (whether agency or permanent) after 12 weeks.
  • Employees will no longer need 10% of workers to sign up to consultation requests; 2% will be the new threshold.

TBA

The Good Work Plan will bring forward several more items of legislation, although the details and dates are yet to be confirmed. Amongst these, and of particular relevance to payroll operators, are:

  • The banning of employers from making any deductions from staff tips or gratuities
  • An increase in breaks in employment to 4 weeks before counting as breaching ‘continual service’
  • Zero hour workers to have the right to request a more predictable and stable contract (although the plan doesn’t remove zero hour contracts altogether)
  • Greater redundancy protection before, during and after maternity leave

If you need help implementing the upcoming changes in your payroll, talk to us.