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HR & EMPLOYMENT LAW Jackie Le Poidevin, Editor-in-Chief, HR Adviser |
Post-Brexit Changes to Holiday Rules: Discover the Government’s Proposals
The government has launched a consultation which, among other less significant proposals, is seeking views on reforming the law on holiday entitlement and pay post-Brexit. We’ll be looking at the full consultation proposals in a future issue of HR Adviser but here we set out what you need to know about these potentially major reforms.
The Retained EU employment law reforms consultation paper and ‘Smarter Regulation to Grow the Economy’ policy paper make the following proposals:
Rolled-up Holiday Pay Will Be Permitted
The government is considering giving employers the option of paying all staff rolled-up holiday pay. This is when you add an amount to each payslip as holiday pay, instead of paying the worker when they actually take leave. Under EU case law, this is illegal because it discourages people from taking a holiday, which can affect their health and wellbeing. Currently, the only lawful way to calculate holiday pay for staff who work irregular hours or have irregular earnings is to base this on an average of their pay over the 52 weeks before the holiday in which they did any work.
Under the proposals, if you offer 5.6 weeks’ holiday a year, you could choose to add 12.07% to staff members’ pay packets as holiday pay. If you offer additional holiday entitlement, you would need to adjust this percentage. You would have to mark the amount clearly on the payslip as holiday pay and the worker would then receive no further pay when taking a holiday.
Simplifying holiday pay calculations for irregular-hours workers would be a welcome step. However, the proposal to permit rolled-up holiday pay for all workers has come out of the blue. It’s not clear what safeguards would be put in place to ensure staff actually take their leave or to prevent employers taking an amount out of employees’ existing pay and labelling this as their holiday pay.
There Will Be a Single Pot of Leave
Under EU law, workers must receive 4 weeks of holiday, which is subject to EU law and European Court of Justice (ECJ) decisions. However, the UK grants 1.6 additional weeks’ holiday which is only subject to UK law. As a result:
- You have to pay staff their ‘normal’ remuneration for 4 weeks of their annual leave, including, for example, commission and regular overtime payments. However, you only have to pay them their basic salary during the remaining 1.6 weeks.
- Different rules on carrying over unused leave into subsequent holiday years apply to the two pots of leave.
The government is now proposing to merge both types of leave. It is seeking views on:
- Whether employers should pay staff their normal or basic salary across all 5.6 weeks’ holiday.
- How to define ‘normal’ pay.
- Whether to change the rules on carrying over leave. Currently, if someone can’t take their holiday entitlement due to being on long-term sick leave, they can carry over 4 weeks’ leave for up to 18 months. However, the government is considering allowing all 5.6 weeks to be carried over, which would be more generous than the existing position.
- Simplifying the method for calculating holiday entitlement during the first year of employment.
Merging both leave entitlements would be less confusing for employees, reduce administrative complexity for employers and make disputes less likely. However, whichever proposal is adopted, there would be losers. If you have to pay normal pay for all 5.6 weeks, this could increase your costs. Conversely, if you only have to pay basic pay, this would result in a loss of pay for some staff.
Tip
You have until 7 July 2023 to respond to the consultation. The government has said it intends to implement reforms to holiday pay and entitlement this year but, for now, you should bear in mind that the law remains unchanged.
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HEALTH & SAFETY Michael Ellerby, Editorial Board Member, Health & Safety Adviser and Risk Assessment & Compliance |
Your Essential Points to Ensure Effective First Aid Provision
Accidents are something we hope to avoid but even the best precautions cannot eliminate risks entirely. Therefore, it’s essential that we are prepared to act proactively in the event of an accident or medical emergency. To establish an effective approach to first aid, you must ensure that your first aid provision is appropriate to the activities you carry out. We explore the key considerations to help you determine a suitable first aid provision for your organisation.
Understanding First Aider Requirements
A risk assessment is vital to ensuring that you have a suitable and sufficient provision of first aid on site. This includes considering the number of first aiders you will need to appoint.
There are no hard and fast rules on how many first aiders you need to have in place. Instead, this is determined by assessing the nature of your work. Consider the type of first aider you require, taking into account things like the types of activity you are carrying out, the environment in which these activities take place, the materials you are working with, your accident history, the size of your workforce and the distance from your site to emergency medical services, etc.
Accidents and medical emergencies can happen at any time, so it’s important to ensure adequate cover will be provided at all times. Think about ensuring first aiders will be present across different shift patterns, when certain people are on holiday, across weekend work and in the event of employee absence.
You might decide to train some of your appointed persons in first aid. Again, the number of people you should train will be determined by your risk assessment. Use a competent provider to deliver basic Emergency First Aid at Work (EFAW) training, or a higher level of First Aid At Work (FAW) training if appropriate, which includes applying first aid to a range of specific injuries and illnesses.
Whilst your appointed persons and first aiders perform a critical role in providing immediate assistance, it’s important to ensure that they do not become casualties themselves. First aiders must prioritise their own safety by maintaining situational awareness, being mindful of potential hazards and utilising the proper personal protective equipment where appropriate.
First Aid Kits and Equipment
What first aid kit or equipment you will need will again be determined by the findings of your risk assessment. For example, an office with four members of staff may only need a small first aid kit, whilst the needs of a large laboratory could include eye wash stations.
Weekly inspections should be carried out to check and maintain the condition of your first aid kit and equipment. Introduce regular checks which include actions such as ensuring the first aid kit remains in the correct location, replacing used stock, removing and replacing any unsuitable items such as out-of-date sterile bandages, inspecting eye wash stations and emergency showers, etc.
Special Cases
There is no one-size-fits-all approach to first aid because every organisation’s needs are different. For example, consider the following cases which may require additional training or provision of equipment:
- For those working with cyanides, specialist training may be considered for first aiders in the use of medical oxygen. In a scenario like this, it’s important that first aiders don’t put themselves in harm’s way and become a second victim of cyanide poisoning.
- Schools or nurseries may consider providing teachers and support staff with paediatric first aid training.
- On sites working with hydrofluoric acid, first aiders should be trained in the use of gluconate gel.
- In the hospitality sector, consideration may be given to ensuring the first aid kit includes burn dressings.
Whilst we always want to avoid accidents and ill health wherever possible, being equipped with the necessary skills and equipment to handle medical emergencies with confidence is crucial. Accidents do happen and by being prepared to deal with these situations, we can ensure a timely and competent response that can mitigate further harm and improve the chances of a positive outcome.
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PAYROLL Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
Generic Notification Service Messages for Student and Postgraduate Loans
If you take on employees who have a student and/or a postgraduate loan, you will need to deduct student loan repayments from their pay if it exceeds the relevant threshold, and pay the amounts deducted over to HMRC with your PAYE and National Insurance. HMRC will send a generic notification service message to employers, and it is important to check for these messages regularly so that they are not missed.
Nature of the Messages
Messages may be sent to remind employers to:
- start taking student loan deductions.
- start taking postgraduate loan deductions.
- stop taking student loan deductions.
- stop taking postgraduate loan deductions.
- use the correct plan type as provided by HMRC.
- not to take student or postgraduate loan deductions for an employee who is subject to the off-payroll working rules; or
- not to take student loan deductions from an employee who only has an occupational pension rather than a salary.
Failure to read the messages promptly will impact on the employee’s repayment of their student debt. If you do not take account of information contained in generic notification service messages, HMRC may contact you by telephone or by post.
Deductions Thresholds
The point at which student and postgraduate loans become payable depends on the type of the loan. For student loans, there are 3 types of loans – Plan 1, Plan 2 and Plan 4. A fourth type of loan, Plan 5, is being introduced for undergraduate and post-graduate courses that start after 1 August 2023. Employers will not need to start taking repayments for Plan 5 student loans until 2026/27.
It is important that you know which type of loan an employee has in order to ensure that repayments are calculated correctly.
The thresholds applying for the 2023/24 tax year are shown in the table below.
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Type of loan |
Annual threshold |
Monthly threshold |
Weekly threshold |
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Plan 1 student loan |
£22,015 |
£1,834.58 |
£423.36 |
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Plan 2 student loan |
£27,295 |
£2,274.58 |
£524.90 |
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Plan 4 student loan |
£27,660 |
£2,305.00 |
£531.92 |
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Postgraduate loan |
£21,000 |
£1,750.00 |
£403.84 |
Repayment Rates
Deductions for student loans are made at the rate of 9% of income in excess of the relevant threshold. The repayment rate is the same regardless of the type of loan. For postgraduate loans, the repayment rate is 6% of income above the relevant threshold. Where an employee has more than one loan, deductions must be made in respect of each loan if the employee’s income exceeds the relevant thresholds.
For example, if an employee has a Plan 2 student loan and a postgraduate loan, deductions are made at the rate of 6% on income between £1750 and £2,274.58 per month and at the rate of 15% on income in excess of £2,274.58 per month. The trigger point for postgraduate loan repayments is £1,750 per month, and until income reaches £2,274.58 per month, repayments are only deducted in respect of the postgraduate loan at the rate of 6%. Once income exceeds £2,274.58 per month, deductions are made on the excess in respect of both the Plan 2 student loan at 9% and the postgraduate loan at 6% — a combined deduction rate of 15%.