National Minimum Wage: The statutory National Living Wage, not only increases from £10.42 to £11.44 per hour from April, but this year for the first time, this rate also applies to employees aged 21 and over from April 2024, instead of the higher age of 23 and over which applies for pay periods up until April 2024.
National minimum wage rates are available here: https://www.gov.uk/national-minimum-wage-rates
Employee National Insurance Contributions decrease
As announced by the Government in the Spring Budget in March, employees’ national insurance is reduced from the 10% level that was introduced on 6 January 2024 to 8% from 6 April 2024. Although, as previously announced, tax bands have been frozen until April 2028 at present, the Government estimates that this means that an average employee earning £35,400 will save just over £900 on National Insurance Contributions per year from April 2024.
Although it has not been uprated to keep in pace with the National Living Wage increase and expansion, following FSB lobbying, the Employment Allowance for small business employers has been maintained at its higher level of £5,000 per small employer, increased from £4,000 in 2022 and from £3,000 in 2020 . FSB’s Policy and Advocacy Chair Tina McKenzie has commented in relation to the Spring Budget that: “There’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs, and economic security small businesses provide is not something the country can afford to risk.”
Holiday entitlement for irregular hours or part-year workers
For employers in England, Scotland and Wales that have irregular hours (such as zero hours) or part-year employees or workers, a new statutory holiday calculation method and an alternative, optional use of rolled up holiday pay for these types of worker comes into effect for employers whose new annual leave year commences on or after 1 April 2024. This means that In a holiday year, irregular hours workers and part-year worker will accrue annual leave at the end of each pay period at the rate of 12.07% of the hours worked during that period, up to a maximum of 28 days. For employers who operate a calendar annual leave year, these changes won’t take effect until January 2025. This change does not apply in Northern Ireland.
See the ‘holidays’ fact sheet on the FSB Legal and Business Hub for further guidance.
Statutory sick pay and family-related leave pay increases
Statutory sick pay increases from £109.40 to £116.75 per week from 6 April 2024 for employees working five qualifying days per week (which is calculated on a pro-rata basis for employees working fewer days per week).
The flat rates of statutory maternity pay and statutory adoption pay (after the first six weeks), and statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay all increase from 7 April 2024 to £184.03 per week, or 90% of the employee’s average weekly earnings, whichever is lower. The rate for first six weeks’ statutory maternity or adoption pay remains at 90% of average weekly earnings.
Carer’s leave
From 6 April 2024, employees in England, Scotland and Wales are entitled to one week of unpaid leave per year to provide or arrange care for a dependant. This is a ‘day one’ right, meaning that employees don’t require a minimum length of service in order to take carer’s leave. Under the Carer’s Leave Act 2023, which has introduced this entitlement, carer’s leave can be taken by employees who need to give or arrange care for a dependant who has:
- a physical or mental illness or injury that means they need care for more than three months
- a disability as defined by the Equality Act 2010
- care needs because of their old age.
See our fact sheet on ‘Carer’s leave’ on the FSB Legal and Business Hub for guidance; as well as the new template ‘carer’s leave policy’ and ‘carer’s leave form’.
Flexible working
New flexible working legislation from 6 April 2024:
1. Removes the requirement for an employee to have 26 weeks’ continuous service before they can make a formal flexible working request under the statutory regime. From this date, the right to make a request to work flexibly becomes a ‘day-one’ right.
2. Employees will also be able to make two flexible working requests every 12 months, whereas previously this was one flexible working request per year. Employers should also be aware that the time limit for employers to respond to flexible working requests (including for dealing with an appeal against a rejection of a request) is reduced from three to two months, although this can be extended if the employee agrees.
3. Employers must consult with an employee before refusing a request. Employees no longer need to explain or justify the impact of the proposed change to their working arrangements.
Employers must ensure they have updated their flexible working policy and procedure by 6 April to reflect these changes. ACAS has published the new Code of Practice for employers which governs flexible working requests made by employees from 6 April 2024 onwards: https://www.acas.org.uk/acas-code-of-practice-on-flexible-working-requests/2024
Fact sheet guidance on ‘flexible working’ and a template policy and letters can be found on the FSB Legal and Business Hub.
Paternity leave
Legal changes to paternity leave have been introduced to make this more flexible for employees. The changes to paternity leave apply where the expected week of childbirth falls on or after 6 April 2024 and:
- Permit employees to split their two week’s statutory paternity leave into two blocks of one week each at any point in the first 52 weeks (rather than the previous eight) after the birth or adoption of a child.
- Notice of entitlement to take paternity leave must be provided to the employer during or before the 15th week before the expected week of birth, followed by at least 28 days’ notice of each period of leave.
For parents of babies born before 6 April 2024, fathers or partners are only able to take one continuous block of paternity leave of one week or of two weeks within the first eight weeks after birth (unless employers operate a policy that provides otherwise).
Fact sheet guidance on ‘paternity leave’ and a template policy and letters can be found on the FSB Legal and Business Hub.
Right to be offered suitable alternative employment in a redundancy scenario for employees during pregnancy and family leave
Employers that plan to carry out redundancies need to be aware that from 6 April 2024 the current legal right for employees placed at risk of redundancy when on maternity leave to be offered suitable alternative employment (where it exists), as a right of first refusal over other employees is extended so it applies:
· from the point an employee informs their employer they are pregnant
· until 18 months after the expected week of childbirth, the child’s birth date, or date of adoption, for employees returning from maternity leave, shared parental leave or adoption leave.