2023: What’s to come for HR and employment law
The year 2023 looks set to be an interesting one for the development of individual employment law rights, with a number of Bills currently on their way to becoming law that will change existing, and provide additional, rights to employees that will help them to better balance their work and personal commitments, which is set to make 2023 a busy one for employers and their HR support.
What we know is coming in 2023
Statutory rate changes
What we know for certain that is coming into effect in 2023 are new rates for the National Living Wage and National Minimum Wage (NLW/NMW), applicable from the pay period following 1 April 2023. These are as follows.
NLW (23+) — £10.42 (Currently £9.50)
21–22 years old — £10.18 (Currently £9.18)
18–20 years old — £7.49 (Currently £6.83)
16–17 years old — £5.28 (Currently £4.81)
Apprentice rate — £5.28 (Currently £4.81)
The increase to the National Living Wage (NLW), paid to those aged 23 and over at 9.7 %, is the largest ever increase to the NLW and ensures that this continues on track to reach the Government’s target of two-thirds of median earnings by 2024.
It has also been confirmed that from 2 April 2023, the rate for family friendly payments, including statutory pay for maternity, paternity, adoption, shared parental and parental bereavement leave, will increase to £172.48. The rate for Statutory Sick Pay will also increase to £109.40. However, the lower earnings limit, over which must be earned on average to qualify for many statutory payments, will remain the same at £123.
Whilst not a statutory development, another rate that is rising (in fact, it rose in September 2022, but implementation can be delayed until 14 May 2023) is that of the Real Living Wage. This rate, set by the Living Wage Foundation and based on their calculations of what individuals need to live, is increasing to £11.95 per hour in London and £10.90 per hour for the rest of the UK.
The coronation, to be held on 6 May 2023 and marked with an additional bank holiday on 8 May 2023, will be for many a once in a lifetime experience. Employers should therefore start to plan how they will deal with time-off requests, and employees wanting to watch coverage of the event whilst working. They will also need to make arrangements where they are expecting to be busy in the lead up to, and during, the event.
In planning for this, employers should consider the following.
What about holiday requests? Will you use “first come, first served?” Communicate this early to avoid disappointed staff.
How will transport issues be overcome? Consider changing hours, working from home or from an alternative location. Where possible, as transport links — especially to and within London — are likely to be especially busy with tourists and visitors.
Employees may be tempted to celebrate, which can mean alcohol — especially on the bank holiday. Are your policies regarding alcohol consumption up to date? Are they widely known amongst the workforce — could be the time to dust them off and publicise them.
Employees may want to take breaks to view the events — speak to them about this and decide together how to manage it.
Not everyone is a fan of the royals. This could lead to disagreements amongst staff, so a reminder about conduct rules, and taking action if it gets out of hand, is recommended.
Hospitality businesses should also take note that the Government has proposed extending licensing hours from 11 pm to 1 am over the bank holiday weekend of the coronation in England and Wales. Employers will need to prepare for this early on if they intend to ask staff to work longer hours, and decide if they will offer extra hours, perhaps with an overtime premium attached or if there are any relevant contractual clauses for compulsory overtime they could enforce (where it is reasonable to do so).
Potential new legal rights
A number of Bills giving new rights are on their way to become law. However, due to the nature of this process, it is not possible to say with certainty if this will happen this year, or what the details of these new rights will be, as they may still be changed. Nevertheless, it is important to be aware of what might be coming so that initial plans can be prepared.
One of these rights is that of carer’s leave. This new right, if passed into law in its current form, will give unpaid carers the right of up to a week of unpaid leave per year, to be used to provide care for someone dependant on them. This is similar to the existing right to time off for dependants, differing however in its time limit of “up to one week per year”.
Neonatal leave and pay
Another new right that may potentially come into law is neonatal leave and pay. This right, applicable from day one and subject to qualifying criteria for pay will allow parents of very sick babies (defined as those admitted to hospital up to 28 days after birth, requiring a continuous stay of seven days or more) a period of up to 12 weeks leave to be with their baby in neonatal care. This will be taken in addition to existing maternity/adoption/paternity rights.
Another new right that is expected to come into law is one that will allow workers to keep 100% of tips and gratuities paid to them, whether by card or cash, or as a service charge. Employers will be under a duty to keep accurate records of tips distribution; employees will have a new right to bring a claim if not.
Amendments to existing rights
There have also been some well published amendments to existing rights that may become law in 2023. Flexible working has been given a lot of attention following increased interest in hybrid working, and the Government’s announcement that they want to make it the “default” position. To do this, the Government has committed to the following changes.
- Make flexible working a day-one right.
- Require employers to consult with the employee before rejecting a request.
- Allow two flexible working requests in any 12-month period.
- Shorten response time to two months.
- Remove the need for employees to set out how the employer will deal with the impact of the request.
This is hoped to make flexible working more accessible, and the process less onerous on the employee. Crucially, however, it does not give employees any greater rights to demand flexible working. Instead, it requires more from employers during the process of negotiating flexible working and places them under a greater burden if intending to refuse the request (such as the need to consult).
UK employment law is on the brink of massive change and we cannot yet say exactly what impact this will have. Legal changes have been proposed to “deal with” EU law that remains in place in the UK. The Retained EU Law (Revocation and Reform) Bill will automatically repeal retained EU law on 31 December 2023 unless legislation is introduced to keep it.
Laws that could change or expire include the following.
- TUPE (unlikely to be scrapped, but could be amended to allow harmonisation of terms).
- Rights to paid annual leave (such as how to calculate a week’s pay).
- Maximum 48-hour working week.
- Agency worker regulations.
- Part-time and fixed-term worker regulations.
Finally, under current rules, before offering redundancy to an employee on maternity, shared parental or adoption leave, employers have an obligation to offer them a suitable alternative vacancy where one exists. The proposal is that new regulations will apply the protections through an expanded period covering from when a woman tells her employer she is pregnant until 18 months after the birth. The 18-month window ensures that a mother returning from a year of maternity leave can receive six months additional redundancy protection. The 18-month window will also apply to adoption and shared parental leave.
The year 2023 is set to be an interesting one in employment law, and businesses may face challenges in keeping on top of the changes. Having a plan for how to deal with what may come, and developing appropriate policies, practices and training to roll them all out will help keep the company ahead of these changes, putting it in the best place to manage them.
Author: Gill Lowcock FCCA
Gill joined Scott & Wilkinson in 2001 and qualified as an Accountant in 2004. Prior to studying Information Business Technology at Myerscough College, Gill attended Garstang High School. Gill is involved in all areas of accounts, audit...
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