Employment Law Changes in 2020: What You Need to Know and Prepare For
Employment law changes will take effect from April 2020. Now is the time to review and update your workplace policies and procedures to stay compliant and avoid penalties.
Written Employment Contracts: What’s New in Employment Law Changes?
The government’s Good Work Plan, published in December 2018, sets out a vision to modernize the UK labour market, especially considering the rapid growth of the gig economy, which includes around 1.3 million workers.
Current law:
Employees who have worked for more than one month must receive a written employment contract within two months of starting.
New law:
From April 2020, all workers must receive a written contract on their first day of work—regardless of how long they are employed.
What Your Contracts Must Include
Existing contracts require the following details:
| Name of employee and employer | Date of commencement |
| Rate of remuneration and method of calculation | Intervals at which remuneration is paid |
| Hours of work | Holiday accrual, pay and bank holidays |
| Terms relating to sickness and sick pay | Length of notice |
| Job title | If temporary contract, expected duration |
| Place of work | Terms if working outside the UK |
The new law adds these requirements:
| Days of the week to be worked | Whether hours of work are variable |
| If hours are variable, how are they determined | Probation period |
| Entitlement to other types of paid leave | Additional remuneration / benefits |
| Required training | Pension schemes |
| Disciplinary and grievance procedures |
Action point: Review your contracts now. While you don’t have to update existing contracts immediately, employees can request an updated version, which you must provide within one month.
Holiday Pay Reference Period Extended
Another significant change affects holiday pay calculations for irregular and shift workers. The reference period has increased from 12 weeks to 52 weeks. This change ensures workers who do overtime or irregular shifts accrue fair holiday pay.
| Working pattern | How a week’s pay is calculated |
| Fixed hours and fixed pay (full- or part-time) | A worker’s pay for a week |
| Shift work with fixed hours (full- or part-time) | The average number of weekly fixed hours a worker has worked in the previous 52 weeks, at their average hourly rate |
| No fixed hours (casual work, including zero-hours contracts) | A worker’s average pay from the previous 52 weeks (only counting weeks in which they were paid) |
Parental Bereavement Leave: A New Statutory Right
Employment law changes introduce Parental Bereavement Leave as a statutory entitlement. Employees can now take two weeks off if they lose a child under 18 or experience a stillbirth after 24 weeks.
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Leave can be taken as one or two separate weeks within 56 weeks of the loss
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Statutory pay applies after 26 weeks’ continuous employment at 90% of salary or £151.20 (whichever is lower)
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Employers can reclaim statutory pay through PAYE
This compassionate leave reflects changing workplace needs and family support.
Minimum Wage Updates
From April 2020, the National Minimum Wage rates increase as follows:
| Age Group | 2019 Rate | 2020 Rate |
|---|---|---|
| 25 years and over | £8.21/hr | £8.72/hr |
| 21 – 24 years old | £7.70/hr | £8.20/hr |
| 18 – 20 years old | £6.15/hr | £6.45/hr |
| 16 – 17 years old | £4.35/hr | £4.55/hr |
| Apprentices (under 19 or first year) | £3.90/hr | £4.15/hr |
Other rates to note:
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Statutory Maternity/Adoption/Paternity/Shared Parental Leave pay remains at £151.20
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Statutory Sick Pay increases to £95.85
IR35 Changes Affect Medium and Large Businesses
Employment law changes also affect personal service companies under IR35. From April 2020, medium and large end clients—not the contractors—must determine employment status for tax purposes.
If caught by IR35 rules, tax and National Insurance contributions must be deducted, just as if the contractor were an employee. This change does not apply to small companies.
Prepare Now for Employment Law Changes in 2020
Employment law changes in 2020 will impact contracts, pay, leave, and tax responsibilities. Taking proactive steps now ensures your business stays compliant and supports your workforce fairly.
Need help updating your payroll? Let our expert team assist you in navigating these employment law changes smoothly.
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