Employment Law Changes 2023: What To Know

While 2023 is well underway, UK employers are gearing up for another wave of changes in employment law that was recently announced in parliament.

As the year unfolds, businesses must brace themselves for a range of regulatory shifts that will shape the employment landscape and necessitate careful attention and adaptation.

From revised minimum wage rates, to adjustments in family-friendly payments, statutory sick pay, and more, employers need to stay informed and prepared to navigate these changes effectively.

The National Minimum Wage and National Living Wage

One of the significant changes in employment law for 2023 relates to the National Minimum Wage and National Living Wage. Since April 1st 2023, new rates have been introduced, bringing adjustments to various age groups.

Here’s what you need to know:

For workers aged 23 and over (National Living Wage), the rate will increase from £9.50 per hour to £10.42 per hour.
Workers aged 21-22 will see an increase from £9.18 per hour to £10.18 per hour.
Workers aged 18-20 will experience an increase from £6.83 per hour to £7.49 per hour.
Workers aged 16-17 will receive a raise from £4.81 to £5.28 per hour.
The apprentice rate will also increase from £4.81 per hour to £5.28 per hour.
Finally, the daily rate for the accommodation offset will raise from £8.70 to £9.10.

While the Real Living Wage and London Living Wage have not been affected, it’s worth noting that the current rates stand at £10.90 per hour and £11.95 per hour, respectively.

These adjustments aim to ensure fair compensation for workers across different age groups, reflecting the evolving economic landscape. Employers should be prepared to implement these revised rates and comply with the new minimum wage requirements from April 2023 onwards.

Statutory Sick Pay (SSP)

Since April 6th 2023, a new rate has been implemented, bringing a significant increase in support for employees.

The rate has increased from £99.35 to £109.40 per week.

This adjustment aims to ensure that employees who are unable to work due to illness or disability receive fair compensation during their absence. UK employers should be prepared to implement the new SSP rate from April 2023 onwards and update their payroll systems accordingly.

Statutory Redundancy Pay

Significant changes are coming to the limits on unfair dismissal and redundancy pay, impacting both England and Wales, as well as Northern Ireland. Since April 6th 2023, the limits on a statutory week’s pay have increased, bringing adjustments to various aspects of employee compensation.

England and Wales: The limit on a statutory week’s pay will rise to £643, resulting in a maximum statutory redundancy payment and unfair dismissal basic award of £19,290. The compensatory award cap for unfair dismissal will increase to £105,707.
Northern Ireland: The limit on a statutory week’s pay will be £669, leading to a maximum statutory pay redundancy payment and unfair dismissal basic award of £20,070. The compensatory award cap for unfair dismissal will rise to £105,915.

It’s crucial for employers to be aware of these changes in order to accurately calculate statutory redundancy payments and awards for unfair dismissal.

Flexible working requests

Amendments to existing employment rights, specifically related to flexible working requests, are on the horizon. The government has committed to several changes in the right to request flexible working, aiming to enhance employee flexibility and work-life balance.

Here’s what you need to know:

The existing 26 weeks requirement will be removed, making it a day one right.
Employers will be required to consult with employees before rejecting a flexible working request.
Employees will have the ability to make two requests within a 12-month period.
Employees must respond to requests within a two-month timeframe.
The requirement for employees to detail how the effects of their flexible working request will be managed by the employer will be eliminated.

The introduction date for these changes is currently unknown. These changes will be implemented through legislation when there is sufficient ‘parliamentary time.’ This provides an opportunity to review your flexible working policy or establish one before the law is enacted.

The Retained EU Law (Revocation and Reform) Bill

The Retained EU Law (Revocation and Reform) Bill holds significant implications for employers, as it could potentially impact all EU-derived employment laws. Unless legislation is introduced to preserve it, these laws will be automatically repealed on December 31st 2023. Small business owners should pay particular attention to this new legislation.

Currently, the EU takes precedence over UK laws in cases of conflict but this will change after the end of this year, granting the government the ability to modify all EU laws retained since Brexit. The wide-ranging consequences of this change are already prompting speculation about potential delays, possibly extending until 2026.

While the exact scope of the impact on employment acts remains uncertain, areas such as agency workers’ rights, Working Time Regulations, and TUPE (which governs staff transfers between businesses), are expected to be affected. However, specific details regarding the implications are yet to be revealed.

As we move forward, we can expect to witness further proposals for changes in employment law that shape the way people are employed. It is crucial to acknowledge that certain rights in the UK already surpass the requirements of EU law, including provisions for holiday entitlement and enhanced maternity leave.

Despite uncertainties surrounding the implementation and impact of the Retained EU Law (Revocation and Reform) Bill on employment acts, it is essential to remember that the UK has its own robust framework for protecting workers’ rights.

By staying attuned to future developments and proactively adapting to the changing legal landscape, employers can ensure compliance while upholding the rights and well-being of their employees.