Employment Law

When a new employee is added to the payroll it is the employer's responsibility to ensure they meet the employee's rights and deduct the correct amount of tax from their salary.

HMRC’s guidance lists the following requirements that an employer must meet for employees on full-time and part-time contracts:

• a written statement of employment or contract;
• the statutory minimum level of paid holiday;
• a payslip showing all deductions, such as National Insurance contributions (NICs);
• the statutory minimum length of rest breaks;
• Statutory Sick Pay (SSP); and
• maternity, paternity and adoption pay and leave.

Employers must also:

• make sure employees do not work longer than the maximum allowed;
• pay employees at least the minimum wage;
• have employer’s liability insurance;
• provide a safe and secure working environment;
• register with HM Revenue and Customs to deal with payroll, tax and NICs;
• consider flexible working requests;
• avoid discrimination in the workplace; and
• make reasonable adjustments to their business premises if an employee is disabled.

Three new pieces of legislation that received cross party support were granted Royal Assent on 24 May 2023. 

1. The Neonatal Care (Leave and Pay) Act 2023: This new Act will allow for up to 12 weeks of paid neonatal care leave. This will be made available to employed parents if their new-born is admitted to neonatal care so they can spend more time with their child. These parents will continue to be entitled to normal maternity, paternity, and/or shared parental leave.
2. Protection from Redundancy (Pregnancy and Family Leave) Act 2023: This Act will extend existing redundancy protections. This will allow for existing protections whilst on Maternity Leave, Adoption Leave or Shared Parental Leave to be extended to cover pregnancy and a period of time after a new parent has returned to work.
3. The Carer’s Leave Act 2023: This Act will introduce a new entitlement of one week of flexible unpaid leave per year for employees who are caring for a dependant with a long-term care need.

The implementation dates of these new employment rights have not yet been announced as the government will need to lay down secondary legislation in due course to implement these new entitlements. This is likely to occur at some time after April 2024.

Employers must ensure they are paying staff at least the National Minimum Wage (NMW) or National Living Wage (NLW). The NMW and the NLW are the minimum legal amounts that employers must pay their workers.

The new NMW and NLW rates came into effect on 1 April 2023. The hourly rate for the NMW (for 21-22-year-olds) is £10.18 and for the NLW is £10.42. The NLW is the minimum hourly rate that must be paid to those aged 23 or over.

It is important that employers ensure they pay the necessary minimum wage rates as there are significant penalties for employers who are found to have paid workers less that they are entitled to by law. If an employee has been underpaid, the employer must pay any arrears without delay. There are penalties for non-payment of up to 200% of the amount owed. The penalties are reduced by 50% if all of the unpaid wages and 50% of the penalty are paid in full within 14 days.

The maximum fine for non-payment can be up to £20,000 per employee. Employers who fail to pay, face a 15-year ban from being a company director as well as being publicly named and shamed.

There are fines for not registering as a childminder if you were required to do so.

GOV.UK guidance on the matter states that you must register as a childminder if all of the following apply:

• the children are under the age of 8;
• you look after them for more than 2 hours a day;
• you look after them in your own home; and
• you get paid to look after them – including payment in kind.

A registration can be made with Ofsted or through a childminder agency.

In order to register, the childminder will need:

• an enhanced check with barred lists for home-based workers from the Disclosure and Barring Service (DBS);
• first aid training for the age group they will look after;
• childcare training;
• a health declaration booklet;
• contact details for 2 references; and
• a certificate of good character from an embassy – if they lived abroad in the past 5 years.

A person does not need to register (although can choose to do so in certain situations) if they are working as a:

• a nanny
• a tutor
• a babysitter and if they look after the children between 6pm and 2am
• a family friend and they look after the children less than 3 hours a day.

There are different rules for someone who provides day-care outside someone’s home – for example, a nursery or creche.

The Check Employment Status for Tax (CEST) tool can be used to help ascertain if a worker should be classified as employed or self-employed for tax purposes in both the private and public sector.

The service provides HMRC’s view if IR35 legislation applies to a particular engagement and whether a worker should pay tax through PAYE. The service also helps determine if the off-payroll working in the public sector rules apply to a public sector engagement.

The software can be used to check the employment status of:

• a worker providing services,
• a person or organisation hiring a worker; or
• an agency placing a worker.

HMRC has said that it will stand by the result given unless a compliance check finds the information provided was not accurate. HMRC will not stand by the results of contrived arrangements and those designed to get a particular outcome from the service. HMRC are clear that this would be treated as evidence of deliberate non-compliance and could result in higher penalties.

The service is anonymous, and the results are not stored online. However, the results can be printed and held for your own records. If any changes take place to the workers role their status should be reassessed.

If you have staff that have been called up to serve on a jury, then you must allow them the necessary time off. You can ask them to request to delay their jury service if their absence would seriously harm your business. Your employee would need to agree to this request and would need to provide written evidence explaining why a delay has been requested. The request to delay jury service can only be made once in a 12-month period, and the employee must say on the jury summons when they will be available.

Whilst employers must provide time off to allow for jury service, there is no legal requirement to pay employees whilst they are serving.

However, the employee can continue to be paid as normal. If this is the case, the employer cannot reclaim money paid to the employee or that the business has lost during the jury service.

If an employer does not pay their employee, then they can claim a loss of earnings allowance from the court. The employer will need to prepare a certificate of loss of earnings for their employee. This form comes together with the jury service letter. 

Employers can also decide to top up the ‘loss of earnings allowance’ by subtracting the court allowance from their employee’s usual take-home pay.