Our Employment lawyers outline the key changes to UK employment law in 2024 and explain the steps employers will need to take to action these changes.

There is a significant amount of employment law reform on the horizon in 2024. A few months into 2024 and we have already seen changes made to holiday entitlement and holiday pay from January as well as changes to statutory paternity leave from March and changes to national minimum wage rates from April. Further reform is on the horizon in July and October 2024 and employers need to make sure they are ready to put in place appropriate training and documentation to protect their business.

Here, we outline the key changes to UK employment law in 2024 and explain the steps employers will need to take to action these changes:

• Holiday Pay and Holiday Entitlement (1 January and 1 April 2024)
• Statutory Paternity Leave (8 March 2024)
• National Minimum Wage Rates (1 April 2024)
• Sick Pay and Family-Related Leave Rates (1 April 2024)
• Carer’s Leave (6 April 2024)
• Rules on Flexible Working (6 April 2024)
• Enhanced Redundancy Protection (6 April 2024)

These legislative changes will have significant ramifications on UK businesses. To stay compliant and prevent claims, employers need to be proactive in updating their procedures; interacting with staff; and modifying their policies to reflect the new regulations.

For further guidance on these changes, please contact our Employment Team.

1. LEGISLATION: Holiday Pay and Holiday Entitlement

When do the changes come into force? 1 January 2024

SUMMARY OF THE CHANGES: The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 came into force and confirmed that workers are entitled to carry over accrued holiday into the following holiday year if they have been unable to take all or part of their holiday entitlement due to:

• Maternity leave, paternity leave, adoption leave, parental leave or shared parental leave – in which case a worker will be entitled to carry over up to 5.6 weeks’ holiday.
• Sick leave – in which case a worker will be entitled to carry over up to 4 weeks’ holiday and this must be taken within 18 months from the end of the leave year in which it accrued.

Up to 4 weeks’ holiday can also be carried over if an employer fails to:

• recognise a worker’s right to paid holiday;
• give workers a reasonable opportunity to take their holiday;
• encourage workers to take their holiday; or
• inform workers that untaken holiday will be lost at the end of the holiday year.

Workers can no longer accrue COVID carryover holiday. Any COVID carryover holiday accrued prior to 1 January 2024 must be used on or before 31 March 2024.

The government has defined an ‘irregular hours worker’ and a ‘part-year worker’ as follows:

• A worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable.
• A worker is a part-year worker, in relation to a leave year, if, under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid.

Under the Working Time Regulations 1998, full-time workers are entitled to a statutory minimum of 5.6 weeks’ (or 28 days) holiday which comprises:

• 4 weeks’ holiday under regulation 13 as required by the Working Time Directive (‘WTD’); and
• an additional 1.6 weeks’ holiday under regulation 13A as required by the Working Time Regulations (‘WTR’).

Regulation 13 or ‘WTD’ holiday is calculated taking account of ‘normal remuneration’, whereas regulation 13A or ‘WTR’ holiday can be calculated based on ‘basic pay’. The new regulations confirm that ‘normal remuneration’ for the purpose of calculating a week’s pay in relation to regulation 13 or ‘WTD’ holiday should include:

• payments, including commission payments, which are intrinsically linked to the performance of tasks which a worker is obliged to carry out under the terms of their contract;
• payments for professional or personal status relating to length of service, seniority or professional qualifications; and
• other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date.

ACTION POINTS FOR EMPLOYERS:

• Review whether and, if so, how to change holiday policies and/or contracts as may be necessary to reflect the new legislation on carryover of holiday. Carry out any necessary consultation with staff.
• Ensure that all workers are reminded to take their holiday entitlement and given a reasonable opportunity to do so. Identify if any employees still have COVID carryover holiday and if so, ensure they are advised to take it by the deadline.
• Conduct an audit to identify staff who will be deemed to be an ‘irregular hours worker’ or ‘part-year worker’.

1. LEGISLATION: Statutory Paternity Leave

When do the changes come into force? 8 March 2024 (Although the changes will only apply where the expected week of childbirth falls on or after 6 April 2024 and in respect of children who are due to be placed for adoption, or enter Great Britain for adoption, on or after 6 April 2024).

SUMMARY OF THE CHANGES:

• Statutory paternity leave will be able to be taken in two separate blocks of one week (rather than in a single block of either one or two weeks).
• Employees will be able to take paternity leave at any point in the first year after birth, and the notice requirements for taking leave will be shortened.

ACTION POINTS FOR EMPLOYERS: Update paternity leave policies and ensure the relevant staff members are given appropriate training on these changes.

1. LEGISLATION: Holiday Pay and Holiday Entitlement

When do the changes come into force? 1 April 2024

SUMMARY OF THE CHANGES: The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (i) set out a new system of holiday accrual for irregular hours and part-year workers (see definitions above), and (ii) permit rolled-up holiday pay for irregular hours and part-year workers.

For holiday years starting on or after 1 April 2024, the new system for calculating holiday entitlement for irregular hours and/or part year workers means that holiday will be calculated in hours (rather than in weeks) and holiday entitlement will accrue at the end of each pay period at the rate of 12.07% of hours worked in that pay period (up to a maximum of 28 days’ holiday). To calculate holiday accrued during a period of sick leave or statutory leave, an average will be taken over a 52 week reference period.

For holiday years starting on or after 1 April 2024, employers will be able to either:

• pay holiday pay when holiday is taken using the new system for calculating holiday above; or
• to ease the administrative burden on employers calculating holiday pay, employers can pay rolled up holiday pay to workers with irregular hours and/or part year workers. Rolled up holiday pay can be paid by way of a 12.07% uplift to the workers’ normal pay rather than paying them when they take holiday. It must be paid at the same time as work done.

ACTION POINTS FOR EMPLOYERS: 

• Continue to identify staff who will be deemed to be an ‘irregular hours worker’ or a ‘part-year worker’.
• Decide whether to pay holiday pay when holiday is taken, or to pay rolled up holiday pay and, if changes are being made, consult with staff.
• Update holiday policies and payroll systems.

1. LEGISLATION: National Minimum Wage Rates

When do the changes come into force? 1 April 2024

SUMMARY OF THE CHANGES: The minimum wage will rise to:

• £11.44 for workers aged 21 and over;
• £8.60 for workers aged 18 to 20; and
• £6.40 for workers aged 16 to 17and apprentices.

Live-in domestic workers will be entitled to the national minimum wage. This will include nannies and au pairs. There will still be an exemption for actual members of the family who perform domestic duties where the worker resides at home.

ACTION POINTS FOR EMPLOYERS: Make necessary changes to pay rates.

1. LEGISLATION: Sick Pay and Family-Related Leave Rates

When do the changes come into force? 1 April 2024

SUMMARY OF THE CHANGES: The rate of statutory sick pay will increase to £116.75 per week. The rate of statutory maternity pay (after the first six weeks), statutory adoption pay (after the first six weeks), statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay will increase to £184.03 per week.

ACTION POINTS FOR EMPLOYERS: Ensure the correct rates are paid for these types of leave.

1. LEGISLATION: Carer’s Leave

When do the changes come into force? 6 April 2024

SUMMARY OF THE CHANGES:

• All employees will have a new statutory right to a week’s unpaid leave to provide or arrange care for a dependent with a long-term care need.
• This is a day one employment right so employees do not need to meet a minimum service requirement to use this right.
• Employees will be protected from detriment and dismissal because they take, or seek to take, a period of carer’s leave.

ACTION POINTS FOR EMPLOYERS:

• Introduce a carer’s leave policy including a form of declaration that they employee meets the legal definition of a ‘carer’.
• Update payroll systems to allow for leave to be recorded in the correct way and ensure there is a consistent approach to calculating unpaid leave.

1. LEGISLATION: Rules on Flexible Working

When do the changes come into force? 6 April 2024

SUMMARY OF THE CHANGES:

• Employees will have the right to request flexible working from day one of employment, without needing to explain the effect of the change.
• Employees will also be able to make two requests in any 12-month period, to which employers must respond within two months.
• Employers will be required to consult with an employee before refusing a flexible working request.

ACTION POINTS FOR EMPLOYERS:

• Update flexible working policy, any template letters or employment contracts.
• Train HR or managers on how to respond to flexible working requests and ensure the timetable for dealing with such requests is amended.
• Review the Revised Acas Code of Practice on requests for flexible working, expected to come into effect on 6 April 2024.

1. LEGISLATION: Enhanced Redundancy Protection

When do the changes come into force? 6 April 2024

SUMMARY OF THE CHANGES: Enhanced redundancy protection is already in place for those on maternity, adoption or shared parental leave and means that those employees take priority in being offered suitable alternative vacancies if their role is at risk of redundancy in comparison to other employees at risk of redundancy.

This protection is being extended so that it will apply not just for the period during which the employees are on leave, but for a period of time after the leave has ended. Protection will also cover pregnant employees from the point of notifying their employer of their pregnancy.

In summary the enhanced protection will now apply as follows:

• In respect of pregnancy and maternity leave, the protection will apply from the time the employee informs their employer of their pregnancy, and will continue until 18 months after the child’s date of birth (if this has been notified to the employer) or otherwise 18 months after the expected week of childbirth.
• In respect of adoption, the protection will apply from the beginning of the period of adoption leave and will continue until 18 months after the child’s placement or, in the case of overseas adoptions, the date they enter Great Britian.
• In respect of shared parental leave (for those who have not taken maternity or adoption leave), the protection will apply from the beginning of the period of shared parental leave and will continue until either (i) the end of the period of shared parental leave if less than six weeks of shared parental leave is taken, or (ii) 18 months after the date of the child’s birth or placement if six or more consecutive weeks of shared parental leave is taken.
• In cases where the pregnancy ends before 24 weeks, the protection will apply from the time the employee informs their employer of their pregnancy and will continue until two weeks after the end of the pregnancy.

ACTION POINTS FOR EMPLOYERS:

• Review and if necessary, update any redundancy policy and/or family friendly policies.
• Train HR and/or line managers on the rights of those employees who have enhanced redundancy protection.