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A holiday entitlement change for zero-hours workers, a higher minimum wage and a bonfire of EU regulations are all on the horizon.

This article provides a comprehensive overview of the 2023 employment law changes from The KC Group to help Small Business owners keep up with the upcoming updates.

There is no doubt that the world around us is changing – cultural norms, workplace norms, the geopolitical landscape, and the use of technology on the rise.

We have also seen the employment landscape change in recent years to accommodate the expectations of the workforce and the needs of business owners.

Small businesses sometimes find it hard to keep up with what’s happening, especially since lobbying and consultations are usually geared towards larger corporations.

Owners of small businesses must be aware of what’s coming down the pipe and, crucially, plan accordingly. With this article, you can prepare for the likely changes in employment law in 2023.

Whenever legislation is proposed, politics is usually involved, especially when it involves new legislation. As a result, it’s important to keep in mind that many things proclaimed and advocated are merely for show rather than in anticipation of their immediate implementation.

Nonetheless, staying informed is not a bad idea.

New employment laws will take effect in 2023

The first part of this year has seen a number of significant changes which are worth mentioning before we begin discussing what’s in store.

First of all, the National Minimum Wage increases on April 1. These changes were announced in November and apply to the upcoming tax year.

As a result, the following rates apply:

  • A National Living Wage of £10.42 an hour is applicable to workers aged 23 and older

  • A wage of £10.18 an hour is offered to those between 21 and 22 years old

  • An hourly rate of £7.49 for workers in the 18-20 age group

  • Workers aged 16-17 are paid £5.28 an hour at a young workers rate

  • For apprentices, the rate is £5.28 per hour

Small Business Advice

Employers are legally required to pay staff according to current legislation – getting the pay right is crucial. Non-compliance can result in fines of up to £20,000 per employee; a public listing by HMRC which can damage a business’ reputation; and a ban from being a director of the company.

The most common mistakes are missing birthdays, incorrect classifications, and not paying full hours worked. In order to avoid an expensive court loss, it’s important to address mistakes head on.

Maternity and sick pay changes

The next pay increase is for statutory parental leave, maternity leave, paternity leave, adoption leave, and shared parental leave. As of Sunday, April 2, the following increases will be in effect:

  • The weekly payment will rise from £156.66 to £172.48

  • In addition, statutory sick pay increases to £109.40 per week on this date.

Bank holiday for Coronation Day

Finally, don’t forget the extra bank holiday to mark the coronation of the new king. It will be two days after the ceremony on Monday, May 8.

This bank holiday will be on top of the eight annual bank holidays we have.

Employers may wonder if this bank holiday will affect their employees. The answer depends on what your contracts say about bank holidays.

Your team is not obliged to have time off on the Monday following the Coronation if your contract specifies a set number or requires different bank holidays. The time may not be paid if you do so.

It is also a good idea to give the team the day off, with pay, as a goodwill gesture. Let your staff know what you decide early so they can plan ahead. It’s also a good idea to let them know that this is a one-time event so that their expectations are managed in the future.

Legislative changes for 2023 confirmed

Retained EU Law (Revocation and Reform) Bill 2022 is the main new law for small business owners to be aware of. There is currently no distinction between EU law and UK law if they conflict. After December 31 this year, all the EU laws we have retained since Brexit will no longer be enforced, allowing the Government to change them.

It is clear that this law has far-reaching implications – enough to make some wonder whether it will be delayed until as late as 2026. Employee rights, working time regulations, and TUPE, which affects staff transferring between companies, are among the employment acts that might be affected. Details are not yet available.

We’ll see more changes to the law surrounding employment in the coming months. As far as holiday entitlements and enhanced maternity leave are concerned, some UK rights already go beyond what EU law mandates.

Requests for flexible working hours

There are also confirmed plans to change the way flexible working requests are handled by employers. In any 12-month period, your employees have the right to request two flexible working requests. Currently, the law specifies a three-month timeframe for responding to these requests.

The Fire and Rehire Code of Practice has been updated. Tribunals may increase awards by 25 percent if they feel the code wasn’t complied with, though the increase isn’t legally binding.

New employment law proposed for 2023

You may have heard that the Government has introduced the Strikes (Minimum Service Levels) Bill to Parliament as a response to the strikes we have all experienced this winter.

There was a previous bill on minimum service levels for the transport sector that will be replaced by this new bill, which will have a broader scope than it replaced, giving the government the power to set minimum service levels for health, border security, education, fire and rescue, transport, as well as the decommissioning of nuclear installations and the management of radioactive waste and spent fuel.

Specifically, the bill would make strikes illegal in England, Wales, and Scotland, removing unfair dismissal protections for strikers, and exposing unions to fines for not complying with employers’ requirements.

Politics clearly play a role here, and implementation is uncertain. However, it’s likely to be in the news a lot, so it’s worth monitoring.

Contracts with zero-hours

As of earlier this month, the Government also began consulting on how to calculate pay for workers who have irregular or zero-hours contracts. It follows the Supreme Court’s decision in Harpur Trust v Brazel and Unison last July.

The court decision brought the holiday pay of part-time teachers in line with the Working Time Regulations 1998. It created an anomaly between how irregular hours workers’ holiday pay is calculated and how part-time employees’ holidays are calculated.

For employers, it means some part-timers will receive a higher holiday entitlement than part-timers who work the same number of hours. Government consultations will examine how to reduce disparities.

It is proposed to use a different method of calculating holiday pay in order to ensure consistency and give employers a clear and simple method to follow. To ensure that holiday pay is calculated correctly, employers must adhere to the ruling until it is superseded.

Those are the main changes to employment law that we know about for 2023.

A general election is coming up next year, during a recession, with one main party under pressure and another looking for opportunities.

Of course, business owners may not be specialists in these matters or have the time or inclination to dig into the details. Despite the fact that many of these proposals are still in their infancy, it’s important to plan ahead and to recognize the risks associated with non-compliance. Don’t hesitate to seek professional advice if you’re in doubt.

The KC Group Recruitment Agency. Your specialist finance, payroll, HR and business support recruitment partner.


Author Amie

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