The UK government has announced a series of new employment laws coming into effect in 2024. From holiday pay and flexible working, to carers and family leave, there are several new pieces of legislation that business owners should be aware of ahead of the new year.
In this article, we’ll cover all the new employment laws expected to be introduced in 2024. We’ll include key dates to mark in your diary, and advise how your business can prepare for the changes to come. Let’s get started.
National minimum wage rate rise
The 2023 Autumn Statement announced the largest-ever increase to the National Minimum Wage (NMW). From April 2024, the following rates will apply:
|Increase in pence
|21 and over
|18-20 Year Old Rate
|16-17 Year Old Rate
The NMW is the minimum hourly rate that most workers in the UK are legally entitled to. From the new financial year, teen and apprentice workers will see the biggest wage boost of over 20%. Young workers’ rates will rise by almost 15% and accommodation offset and adult employees’ hourly earnings will increase by almost 10%. All of these minimum wage hikes are the biggest to date, and have been introduced as a result of high inflation and the cost of living crisis.
Most UK workers in the above brackets are eligible to receive the new national minimum wage. This includes temporary and agency staff and part-time employees. The only exemptions are:
- The self-employed
- Student interns
- Those on school work experience placements
- Voluntary workers
- Those who are work shadowing
Businesses of all sizes can prepare for this new employment law by ensuring that their finance, payroll, and HR departments are fully aware of the new rates. This is especially important if you have, or are planning to bring an apprentice on board, or if your employees are paid an hourly rate as opposed to an annual salary.
New employment law on holiday pay
The new year is expected to introduce some of the most considerable changes to holiday pay and annual leave that the UK has seen for some time. From as early as 1st January 2024, the following new regulations will apply:
- Irregular and part-time workers will be entitled to rolled-up holiday pay at a rate of 12.07%
- Holiday pay entitlement will include additional payments
- Employees may carry over any unused holiday due to statutory family or sick leave, or by the employer’s fault
Rolled-up holiday pay for irregular and part-year workers
This new employment law confirms that holiday pay may be rolled up in the new year for those working irregular (zero-hour contracts) or part-year hours only. The entitlement is capped at 28 days per year.
Rolled-up holiday pay is where an employee receives additional pay on top of their basic hourly rate. This additional pay represents their holiday pay regardless of when they actually take their annual leave.
Historically, it has been easier to use this method for irregular staff who may not use up all (or any) of their holiday allowance. Despite its simplicity, rolled-up holiday pay has previously been unlawful, as it meant that qualifying workers could receive their entire holiday pay without taking any holiday at all.
For this reason, all employees currently receive their holiday pay when they take annual leave. However, from 1st April 2024, employers may once again issue rolled-up holiday pay to their irregular and part-year employees.
If they do, holiday pay is to be applied at a rate of 12.07% on top of the employee’s basic hourly rate per pay period. It must also be clearly displayed on their payslip.
Holiday pay entitlement changes
Also from 1st January 2024, additional payments that employees receive such as commission, bonuses, and overtime will be included in their holiday entitlement.
Currently, all UK workers are entitled to 5.6 weeks’ holiday pay. This is made up of 4 weeks’ Working Time Directive (WTD) holiday, based on “normal remuneration”, and 1.6 weeks’ Working Time Regulations (WTR) holiday pay, based on basic pay.
Previously, additional payments have not been part of an employee’s normal remuneration. However, in the new year, it will include:
- Commission payments received specifically for performance-based tasks that a worker is contractually required to carry out
- Pay increases for length of service, seniority, or professional qualifications
- Overtime paid in the 52 weeks before the calculation date
If you’re not sure how much holiday your employees are entitled to, use the holiday entitlement calculator.
Carrying over annual leave
In 2024, the WTR will allow employees to carry over any unused holiday allowance due to maternity, family, or sick leave. It may also be carried over annual leave that has not been permitted to be taken by the employer.
If a worker accrues unused annual leave while on statutory family leave or during a sickness absence, the new rules are straightforward – they may carry it over for a maximum of 18 months after the current holiday year.
Slightly different rules will apply if an employee ends the holiday year with surplus annual leave because an employer is at fault. This means that they have:
- Incorrectly classed the employee’s worker status (i.e as self-employed)
- Failed to give the employee a reasonable opportunity to take their entitled annual leave allowance
- Failed to inform the employee that any unused holiday that is not carried over will be lost
In the above instances, employees will now be able to carry over a maximum of 4 weeks’ holiday per year. They may continue to carry it over every year if the employer repeats the above failings.
There are 3 new significant new employment laws around holiday entitlement and pay in 2024. All employers must assess their workers’ employment status and ensure that they understand the rules that apply to them as well as hold all the necessary documents and systems in place to administer them correctly.
Reduced Transfer of Undertakings Protection of Employment (TUPE) rights
TUPE rights protect employees and their benefits when they transfer from one employer to another. It applies when a business is taken over by a new company (in part or in full) and when service provisions change (e.g. when an in-house role is transferred to a contractor)
The new TUPE regulations, which apply to transfers made on or after 1st July 2024, remove the requirement for small businesses to appoint an employee representative. Instead, they will be able to consult directly with their employees in the event of a transfer.
Reduced TUPE rights apply to:
- Employers with 50 employees or less, no matter the size of the transfer; and
- Transfers involving fewer than 10 employees, no matter the size of the organisation.
As a business owner, you must ensure that your organisation remains fully compliant with the new TUPE legislation. Failure to fulfil your obligations as an employer could lead to a penalty. If you’re unsure if TUPE applies to your transfer, contact Citizens Advice, or find more information on TUPE on the government website.
Statutory carer’s leave
From April 2024, the new Carer’s Leave Act 2023 will entitle eligible workers to statutory carer’s leave of at least one unpaid week per year. To qualify, employees must care for an elderly dependent or someone with a long-term (3 months or more) illness, injury, or disability.
This new employment law is designed to provide employees with the flexibility to manage their work and carer’s duties as well as help to improve their overall well-being.
Workers will be able to request statutory carer’s leave no matter their length of service with the company, so they may use it from day one. It is yet to be confirmed whether a minimum amount of notice will be required when requesting carer’s leave and whether the employer can refuse a request.
Statutory neonatal care leave
Maternity and paternity leave will both see a boost in the new year in special circumstances. From October 2024, parents with babies in neonatal care will be entitled to a maximum of 12 weeks off work. This entitlement will apply on top of their maternity or paternity leave entitlement.
Employers will be required to pay qualifying staff during neonatal care leave at the same rate as their maternity/paternity pay policy. Also, there is no minimum length of service requirement to qualify.
For business owners, it’s crucial to take the time and care to ensure that relevant and qualified staff are sufficiently trained on this new employment law. Employees’ requests for neonatal care leave should be treated fairly and carefully in accordance with the Equality Act 2010.
New employment law on flexible working
We expect to see new employment laws concerning flexible working next year. Employees can currently make one flexible working request per year after 26 weeks of continuous service. It must also currently supported by an explanation of how their flexible working adjustment will impact the business.
Flexible working requests concern where and how people carry out their roles. This includes practices such as working from home, adjusted start and finish times, and part-time work.
Under the new Employment Relations Act 2023, all employees will be entitled to make two requests per year with no minimum length of service and no requirement for justification. Employers are also required to respond to flexible working requests within three months, which will be reduced to two months.
The date on which this employment law comes into effect is yet to be confirmed. However, it is expected to be around July 2024. This gives employers a reasonable amount of time to prepare for the changes since the bill was initially announced in the summer of 2023.
For a smooth transition, businesses should introduce a flexible working policy to their staff as soon as possible if they haven’t already. It’s useful to announce these important changes to your employees and relevant senior staff (such as HR and line manager) well in advance and determine suitable flexible working practices that benefit your team and company.
Statutory right to request predictable working patterns
Similar to the above, some employees will be able to request more predictable working patterns from their employers in 2024. Following the NMW uplift, the new Predictable Working Act focuses on enforcing fair working conditions and employment protection for flexible workers.
This primarily concerns those on zero-hour and fixed-term contracts of 12 months or less. Eligible workers may ask their employer for more certain working hours and contracts with a formal application once they have completed at least 26 weeks of service (this doesn’t have to be continuous).
This new employment law will introduce significant benefits for both employees and businesses. Flexible workers will be able to secure more solid employment patterns that meet their needs, reducing unemployment periods and time spent looking for work. Meanwhile, businesses may see improved staff retention rates and productivity, and a happier workforce.
It is yet unconfirmed when this policy will be officially introduced, but it is likely to be around September. If your company employs flexible staff, it’s essential to familiarise yourself with the Predictable Working Act. It explains who is eligible to make a request and the employer’s rights when responding to requests.
Other employment laws expected in 2024
On top of the above, employers should also expect the following employment laws to come into effect next year:
Fair allocation of tips
Businesses that allow employees to receive tips, gratuities, and any other service payments will need to ensure that those payments are allocated fairly. This new legislation, expected in May 2024, requires employers to issue a written policy on how they handle and distribute tips and keep a record of payments for 3 years.
Sexual harassment prevention
Under the new Worker Protection Act 2023, employers will have an amplified duty to take proactive steps to prevent and tackle sexual harassment in the workplace. If the duty is neglected, employers may face legal action and a significant penalty of up to 25%, if compensation is issued by an employment tribunal.
This legislation comes into force in October 2024. Businesses should prepare by updating their internal policies accordingly, training relevant staff on their duties and complaint procedures, and supporting employees.
There are some significant changes to employment laws coming in 2024. New rules around holiday pay and annual leave are some of the biggest changes that will affect most (if not all) UK businesses.
On top of that, employers should expect the minimum wage rate to rise considerably, TUPE rights to reduce in certain situations, the introduction of carers and neonatal care leave, workers to be able to request more flexible and predictable working terms, fair allocation of tips and service payments, and new duties to prevent sexual harassment in the workplace.
We hope this guide has been useful in narrowing down all the new employment laws coming into effect next year, and explaining how they may affect your business. If you have any questions or comments, please post them below or get in touch with our team.