The start to a new year sees legislative updates on the horizon for the new business year in April 2024.
Changes include a higher than normal rise in the national minimum wage; holiday pay guidance in relation to employees who work irregular hours, and an amending to the right to request flexible working, so that it becomes a day one right.
Nazia Kauser, solicitor in the employment team at Wake Smith Solicitors, looks at the forthcoming changes and how these will affect employers and employees, in part one of two articles.
National Minimum Wage rises
The National Minimum Wage rises every year, however April 2024 brings higher than the standard increases:
- Workers aged 23 and over receive the highest rate of for national minimum wage. Currently, there is a lower rate for workers aged 21 and 22. However, this rate will change with 21 and 22-year-olds moving to the higher rate of pay.
- For those over compulsory school age but not yet 18 – the rate will increase to £6.40 per hour from £5.28
- For apprentices aged 19 and under (19 and over in their first year of apprenticeship) – the rate will increase to £6.40 per hour from £5.28
- For those aged 18 to 20 – the rate will increase to £8.60 from £7.49
- National living wage (for those over 21 and over) – the rate will increase to £11.44 per hour from £10.42
6 April: increases to annual tribunal limits and statutory redundancy payments
The Government is yet to announce increases to the compensation and the maximum week’s pay for the purposes of calculating redundancy payments and basic tribunal awards.
However, this is usually increased from the 6 April in line with RPI. If RPI falls, then these amounts stay the same.
As a reminder the 2023 limits are:
- The maximum week’s pay for calculating statutory redundancy payment and unfair dismissal basic award increases to £643 (previously £571)
- The maximum basic award for statutory redundancy payment and unfair dismissal awards increases to £19,290 (20 weeks pay subject to the limit on weekly pay above with a 1.5 multiplier if the employee is 41 or older)
- Maximum compensatory award for unfair dismissal (unlimited for certain automatically unfair dismissals such as health & safety or whistleblowing) increases to £105,707(previously £93,878).
Holiday pay for part-year and irregular hours workers only
The Government has issued new guidance allowing employers to use the practical 12.07% “rolled up” method for calculating holiday pay for irregular hours and part year workers.
Although these reforms (to the Working Time Regulations 1998) came into force in January this year, they apply to leave years that begin on or after 1 April 2024.
The new regulations define irregular hours workers and part year workers as:
- An irregular hours worker- is classed as such if the number of paid hours they work is wholly or mostly variable.
- A part year worker, as an example, a school lunchtime assistant who only works during term time and who is only paid when working. However, if the lunch assistant is instead paid an annualised (flat) salary throughout the year, has weeks when they are not working (school holidays) but is paid for these non working weeks, they wouldn’t be classed as a part year worker.
- Rolled up holiday pay allows employers to include an additional amount with every payslip to cover a workers’ holiday pay, as opposed to paying holiday pay when a worker takes annual leave.
- The holiday pay is calculated at 12.07% of the total qualifying pay for that period. The new guidance states that from 1 January 2024, the qualifying pay must include commission payments, and any overtime payments which have been paid regularly to a worker in the 52 weeks preceding the holiday pay calculation date.
Workers with regular hours and fixed pay are not allowed to be paid rolled up holiday pay.
Flexible working Act changes – Day One right to request from April 2024
The Employment Relations (Flexible working) Act 2023 received its royal assent in July 2023.
In December 2023, the Flexible Working (Amendment) Regulations 2023 were laid before parliament.
The Regulations remove the requirement that an employee must have 26 weeks’ service in order to be able to make a request for flexible working. They make the right to request flexible working a Day One right.
This Day One right will come into effect for all flexible working requests made on or after 6 April 2024. Until then employees will still need 26 weeks service with their employer before they are able to make a request.
In addition to making a right to request flexible working a day one right the Employment Relations (Flexible working) Act 2023 makes these additional changes to the flexible working regulations:
- Employees will be able to make 2 flexible working requests a year, rather than the current one.
- Employers must respond to requests earlier, within 2 months, rather than 3, if no extension is agreed.
- There are new requirements for employers to consult with the employee before turning down their flexible working request. Sadly, the requirement to ‘consult’ is not defined in the act or the regulations. The draft ACAS Code of Practice on requests for flexible working sets out as follows:
- “Meetings about requests should be approached with an open mind. They are a valuable opportunity to listen and engage meaningfully with each other so that a fully informed, evidence-based decision can be made. This includes jointly exploring alternative solutions if the original request cannot be accepted. (Our phasis added).
- Employees will no longer be required to lay out how the flexible working request might impact the employer.
Further advice
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