What Payroll Issues Will Upset Your Business This Year?

Staying ahead of the game through team organization, outsourcing and savvy research

2020 will see payroll and HR teams in the UK handling several new challenges.

There are several legislative aspects that payroll professionals need to be aware of going in to 2020, which are likely to come into effect in the UK’s new financial year; 6th April 2020. Added to that are a whole host of changes in UK HR and it’s going to be an interesting year.

The ‘pay reference period’ for those employees working irregular hours will change from 12 weeks to 52 weeks. This means that holiday entitlement for such employees will be calculated by averaging the number of hours worked over 52 weeks, rather than 12.

Passed in 2018; this legislation is likely to come into being in April. It means that parents will have a right to two weeks of leave after a child (under 18) dies, or there is a stillbirth after 24 weeks of pregnancy. This could be unpaid or paid (statutory bereavement pay) depending on whether they have worked 26 weeks of service or not.

2020 will see the introduction of three new lawful rights for agency workers; Agency workers must be paid the same as permanent members of staff in the equivalent role, after 12 weeks.

Employed agency workers will be protected from unfair dismissal or suffering a detriment, if reasons are related to asserting rights associated with The Agency Worker Regulations.

Agency workers will be entitled to a clear document detailing their employment relationships and agency terms and conditions.

The current National Living Wage for those aged over 25 is currently £8.21 per hour, however Chancellor of the Exchequer Sajid Javid has said he wants it to be increased to £10.50 within the next five years. While the projected rate for next year is currently £8.67, it is worth keeping in mind the potential need to rearrange your company’s 2020 payroll budget.

In April 2020 the repayment thresholds for pre and post 2012 student loans will increase. Plan 1 (pre-2012) loans will need to be repaid after an employee has reached a salary of £19,390, and Plan 2 (post-2012) loans after £26,575. This will need to be taken into account by payroll professionals when making Student Loan deductions.

The outcome of Brexit is finally concluding but business owners and payroll professionals need to be prepared for the next steps. Find out more about the impact of Brexit on SMEs.

In addition to payroll challenges, 2020 is likely to see a number of HR challenges that will impact on HR professionals across the UK.

Believe it or not it has been10 years on from the UK’s Equality Act 2010. Now, the government is taking a close look at how thoroughly employees are protected from sexual harassment at work, and whether or not the existing legislation could go further.

MPs are currently discussing ways in which families can be better supported with their work-life balance and includes ideas such as neonatal leave. Also up for discussion is pay for those who have babies who require special care after birth, and transparency of flexible working opportunities.

Pregnant women and new mothers will be protected from redundancy for an additional six months, meaning they will now be protected for up to two years. This includes adoptive parents.

UK Government is considering the idea of creating one body to enforce and address employment rights for businesses and employees. This would include rights regarding everything from health and safety to discrimination, and modern slavery.

2020 will again provide HR and payroll teams with challenges that business will be met with in the coming year. Staying ahead of the game through team organization, outsourcing and savvy research will put teams in the driving seat for success.

Additional Resources

Top Ten UK Payroll Issues 2020
Top Ten UK HR Issues 2020