employment law

What employment law changes should small businesses be aware of?

When you’re busy running a small business, keeping up with changes in employment law might seem challenging – but it’s vital to be aware of these updates, as you could risk a fine if you don’t. Here are the key changes that happened in April 2019 that your small business needs to know about.

Minimum wage

One of the major changes in employment law this year is to the legal minimum wage. You need to check if you are paying your employees enough. As of 1 April 2019, the National Minimum Wage rates mean you’ll need to pay a minimum of £8.21 an hour to workers aged 25 or over. For those aged 21 to 24, the rate is £7.70 an hour, while for those aged 18 to 20, you’ll need to pay £6.15 an hour. If you have any younger workers, who are younger than 18 but older than compulsory school age, you’ll need to pay them £4.35 an hour, and apprentices should be paid £3.90 an hour.

Pay slips

There have been some changes to what you’re required to do regarding payslips. As of 6 April 2019, you’re required to send every employee a payslip on or before pay day, including staff who work on casual, zero-hours or agency contracts. Not only that, but if the employee doesn’t work a set number of hours each month, you’ll also need to make sure their payslip shows how many hours they’ve worked.

Pension contributions

Another change that came into force in April concerns auto-enrolment pension contributions. As an employer, you’re now obliged to contribute 3% rather than 2% to your employees’ pensions. The increase is higher for the employees themselves, who’ll now have to pay in 5% rather than 3%.

Statutory sick, maternity and redundancy pay

Statutory sick pay increased from April, rising to £94.25 a week, and statutory maternity pay also rose, along with other family payments (paternity, adoption and shared parental leave), to £148.68. There are changes to statutory redundancy pay as of 6 April as well. It’s still calculated based on the employee’s length of service, age and weekly pay, but the change is that the maximum weekly pay used to calculate redundancy pay is now £525. Statutory redundancy pay applies to employees who’ve been with you for two years or more.

Whether you manage payroll yourself or you outsource it, it’s always important to keep abreast of changes to employment law. You can find out more about other forthcoming changes here.