Staff handbooks, policies and updating contracts in accordance with new employment law tend to get lost among the everyday running of a small business. Add to the list GDPR requirements, increased National Minimum Wage, pension auto-enrollment and Brexit implications, there’s a lot for small business to stay on top of this year.
Keeping on top of employment law is challenging enough, but more so when you have little or no HR resource. However, neglecting basic HR functions can have negative implications on the smooth running of HR tasks including recruiting, onboarding, disciplining, and dismissals. To achieve long-term success you need to ensure your HR responsibilities are taken care of and that any issues with employees are resolved before they have a negative impact on your company. Taking a proactive approach to HR compliance is vital to achieve this.
Here are our views on the top employment law compliance challenges for HR this year. HR teams should be preparing for these, which involves a review of systems and processes.
1. Brexit And Settled Status For EU Nationals
The EU Settlement scheme will open fully by 30 March 2019. The test phase of the scheme is now open, but you must meet all the requirements to apply. When you choose to apply may depend on your circumstances. The deadline for applying will be 30 June 2021, or 31 December 2020 if the UK leaves the EU without a deal.
To be eligible for settled status you’ll need to have lived in the UK for at least six months in any 12 month period for five years in a row, and be able to prove it. However, if you’ve not lived here for five years in a row you may still be eligible for pre-settled status. You can find out more here.
2. Increase in National Minimum Wage – April 2019
From April this year the hourly rates for both the National Living Wage (NLW) and the National Minimum Wage (NMW), as set within the last Budget, will increase as detailed below:
- The NLW rate weighted for workers in London will not be reviewed until November 2019.
- The NLW rate for workers aged 25 and over will increase from £7.83 to £8.21.
- The NMW rate for workers aged between 21-24 will rise from £7.38 to £7.70.
- The rate for 18-20 year olds will increase from £5.90 to £6.15.
- Those over compulsory school age, but not yet 18, will see a rise from £4.20 to £4.35.
- The rate for apprentices will increase from £3.70 to £3.90, providing the apprentice is under the age of 19, or 19 and over but within the first year of their current apprenticeship.
3. Pension Auto-Enrolment Contributions – April 2019
Increases will be made to the minimum contributions payable to auto-enrolment pension schemes. These changes will come into place from April this year and affect both employers and employees.
Currently, an employer must contribute a minimum of 2% of an eligible employees pre-tax salary to their pension pot, with an employee adding 3%. The amounts will change to 3% for employers contributions and 5% for employees. It’s advisable for employers to allow adequate time to consult with staff before these changes take place, which will affect both employees pension contributions and take home pay.
4. Payslips changes – April 2019
From April 6, those eligible to receive payslips will extend to every worker on your payroll, not just those classified as ‘employees’. Currently, legislation does not require payslips to be issued to contractors, freelancers and other types of ‘non-employee’ workers. Employers will also have to include how the payment was calculated, in cases where the hours and rates are variable. Employers will need to work with their payroll departments to ensure everything is in place for April’s deadline.
Although GDPR compliance is not a new requirement in 2019, keeping track of all your HR documentation and complying with GDPR requirements is an ongoing challenge. To overcome the problems of updating records and locating files, we recommend storing and updating all of your employee information in secure, cloud-based HR software – making everything easily accessible and secure, wherever you are.
HR compliance is an ongoing process that means staying on top of employment law to ensure you meet your legal obligations. Are you following a fair recruitment policy? How do you deal with sickness and holiday entitlement? What do you have in place regarding the health and safety of your workforce? Do you fully understand all of your HR obligations?
How To Be More Proactive With HR
As your business grows, the need for compliance becomes more evident as issues become more complex. Your responsibilities regarding your employees will expand to cover hiring, firing, discrimination, harassment, safety, wages, payroll and benefits. Having an expert HR professional on hand will give you peace of mind that your employees and legal obligations are taken care of.
Ensure that you are always meeting your legal obligations as an employer. Sign up to our HR Compliance service, a low-cost monthly service, an affordable option for any business. It’s designed for any business owner that needs the essentials put in place and want’s the peace of mind that all legal requirements are met, laying the foundation for developing a thriving, positive company culture.