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Employment Contracts & Recruitment
Equality & Discrimination
Holiday & Working Time
Employment & HR

Key employment law changes coming in January 2024

Primed Team
28 November 2023 3 minutes

There's a range of new employment laws coming in January 2024 that businesses need to be aware of and should start preparing for them now.

Changes outline crucial amends to the Employment Rights Regulations which governs holiday pay, TUPE and Working Time Regulations, along with key changes to the Equality Act and preventing illegal working.

Changes to Employment Rights – January 2024

The government has unveiled a draft statutory instrument that outlines crucial amendments to holiday pay, TUPE, and working time regulations: The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023.

Expected to be enforced from 1 January 2024, these changes aim to provide clarity for employers around some key pieces of EU derived law, many of which have been the subject of various case law.

Here’s a breakdown of the key changes:

  • Simplified Holiday Pay Calculations: The proposed changes permit rolled-up holiday pay (at 12.07% of pay) for part-year workers and those with irregular working hours. This will come as a relief to many employers who have been stumped since the Harpur Trust v Brazel holiday pay decision earlier this year.
  • Retained EU Case Law Clarification: Various pieces of retained EU case law are restated to emphasise their continued relevance in UK law post-Brexit. This includes allowing the carryover of 4 weeks annual leave to the following year in cases where a worker is unable to take leave due to sickness or where they are prevented from taking all their holiday by the employer (for example, due to business demands). It also provides a welcome resolution to the current contradiction surrounding the carryover of holiday due to family related leave. Going forward, it will be clear that employees on family related leave will be entitled to carryover all of their holiday entitlement to the next holiday year.
  • Expanded Definition of ‘Normal Remuneration’: For the 4 weeks of leave derived from the Working Time Directive, ‘normal remuneration’ for holiday pay calculations will include commission payments and other regular overtime payments, cementing the principles established over the years through various case law.
  • Removal of Additional Record-Keeping Requirements: The onerous working time record-keeping requirements outlined in the ECJ judgment in CCOO v Deutsche Bank are removed. This decision alleviates a huge burden on employers, who are currently required to keep records of all working and rest time.
  • TUPE Transfer Consultation Flexibility: Small businesses (with fewer than 50 employees) involved in TUPE transfers of any size, and those undertaking a small transfer (of fewer than 10 employees), gain the flexibility to consult employees directly if no existing representatives are in place.


Equality Act Amendments

A pivotal update is on the horizon as we anticipate amendments to the Equality Act 2010, set to come into effect on January 1, 2024. These amendments, encapsulated in the Equality Act 2010 (Amendment) Regulations 2023, not only reinforce existing discrimination protections but also introduce nuanced changes.

  • Indirect Discrimination by Association: The legislation broadens the scope, expressly allowing claims of indirect discrimination by association. This means individuals not directly possessing a protected characteristic can claim discrimination if they suffer similar disadvantages from an employer’s policies, practices, or criteria.
  • Definition of Disability: The definition of disability will explicitly include consideration of an individual’s ability to participate fully and effectively in working life when considering whether they can undertake ‘day-to-day activities.’
  • Equal Pay Comparator – Single Source Test: The introduction of a ‘single source’ test for establishing an equal pay comparator. This test allows an equal pay comparator to potentially operate in a different business as long as the entity setting the terms remains the same.
  • Extension of Direct Discrimination Protection: The protection against direct discrimination will encompass statements indicating a reluctance to recruit individuals with specific protected characteristics. This applies even when there’s no active recruitment process or identifiable victim.
  • Breastfeeding Discrimination: A welcome clarification includes confirmation that discrimination related to breastfeeding is protected under the characteristic of sex.

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Preventing illegal working: new Code of Practice

In a recent announcement, the Home Office has unveiled key updates regarding fines for illegal working, which are scheduled to take effect from 22 January 2024. As part of this transition, a comprehensive draft code of practice on preventing illegal working has been presented, pending approval by Parliament.

This code will be instrumental in guiding all right-to-work checks, including follow-up assessments to maintain a statutory excuse. Employers should refer to this code as it will be taken into account by the Home Office when determining the level of any fine.

Here’s a glimpse into the essential aspects of the draft code:

  • Establishing statutory excuse: The draft code explains how employers should conduct right to work checks in order to establish a statutory excuse against the civil liability for employing an illegal worker.
  • Administration and calculation of civil penalties: Understanding how civil penalties are administered and calculated is crucial for businesses. The code provides insights into the mechanisms behind these penalties.
  • Fine Structures: The Home Office confirms that the baseline for civil penalties will be £45,000 per worker for initial breaches and £60,000 per worker for repeated breaches. It’s noteworthy that reductions may be applicable under specific conditions. For instance, mitigating factors or prompt payment in full within 21 days for a first penalty could lead to a reduction.



The Autumn Budget – April 2024

 Here are a few key highlights from the Autumn budget which affect employers/employees:

  1. Employer National Insurance Contributions (NICs): The government has announced a cut to the main rate of Class 1 employee NICs from 12% to 10% from 6 January 2024 and a cut to the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024. It has also announced that no one will be required to pay Class 2 self-employed NICs from 6 April 2024.
  2. National wage increases: From 1 April 2024, the National Living Wage will increase by 9.8% to £11.44 an hour for eligible workers across the UK aged 21 and over. Young people and apprentices on the National Minimum Wage will also see a boost to their wages, which will increase to £6.40 an hour. The accommodation offset will also increase, to £9.99 per day.
  3. Business rate discounts: The current 75% business rates discount for retail, hospitality and leisure firms will be extended for another year.


Advice from the experts

If you’d like to pick our brains about any of the employment law changes coming in 2024, book a free 1-2-1 call today with one of our team today.

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