News & Insights: 9 HR changes in 2024

National Living Wage, Flexible working rules, tips and sponsorship - get ready for 2024

In 2024 we will have a number of HR laws coming in, you need to prepare NOW to see how you will navigate it for your business. Here are 9 changes.

Change 1: Living wage increase & it will be for over 21year olds now

What is National Minimum Wage and Living Wage?

In the UK we use the National Minimum Wage and National Living Wage system to pay people, some factors like age and type of employment affect this total too. The government provides guidance on what these rates are and where they apply. To best understand National Minimum Wage you can check the governments website for the current National Minimum Wage and Living Wage rates for all age brackets.

The Living wage from 2024 is payable to anyone over the age of 21. This is similar to a universal income model the government started a number of years ago. The National living wage is at £11.44 from April 2024 onwards.

It was announced, for over 21 year olds, this will now be at £11.44 per hour. This means if someone works (after breaks) From 2024, the higher rate will be available for 21 and 22 yr olds not just over 23 yr olds:

-35hrs £20,820

-37hrs£22,010

-40hrs£23,795

-45hrs£26,769 –

-48hrs£28,554

The rates for under 21 year olds, at the time writing this has not been released yet.

This is basic wage excluding bonus (and for our hospitality network, excluding tips/service charge). This is after breaks, you might have a lunch break, afternoon break and morning break. These are taken off when calculating it. Most companies tend to give 15-20 mins in the morning & afternoon and 30min to 1 hr for lunch. There also a move away from long hours and shorter weeks in recent years

National Living Wage and National Minimum Wage rates for 2024
  NMW Rate Increase in pence
National Living Wage (21 and over) £11.44 £1.02
18-20 Year Old Rate £8.60 £1.11
16-17 Year Old Rate £6.40 £1.12
Apprentice Rate £6.40 £1.12

These new pay rates will start from April 2024 and was announced on November 21st 2023 by the Government.

Change 2: Service charge and Tips

Allocation of tips:

The Employment Allocation of Tips Act 2023 received royal assent earlier this year and is expected to come into force in 2024. This new law will make it illegal for companies in the UK to take a portion of the service charge or tips from their staff who are employed on PAYE by restaurants or hotels.

For years, there have been reports about how some restaurant and hotel chains were pocketing a portion of the service charge or tips left for their staff by customers. This act will put an end to this unethical practice, ensuring that all tips are fairly distributed among the employees who provided the service.

The act will require companies to be transparent about their tipping and service charge policies and inform customers if any portion is kept by the business. It will also give employees the right to challenge any decision made by their employer on the allocation of tips. Further, it will ensure that the tips are not used to make up the minimum wage, which will have a significant impact on the lives of low-wage employees in the hospitality industry.

This move comes as a great relief to many workers in the hospitality industry, especially those who rely on tips as a significant part of their income. It will help to ensure that their hard work is rewarded and that their employers cannot take advantage of them by keeping a portion of their tips.

Overall, the Employment Allocation of Tips Act 2023 is a significant development for employees in the hospitality industry. It will provide greater transparency and fairness in the distribution of tips and service charge, making it a win for both workers and customers.  This is for workers employed direct by a Restaurant, Hotel or Bar on PAYE either on a Full time, part time or casual contract.

Change 3: Sponsorship

BREAKING NEWS – December 4th 2023: The UK government has announced that it will increase the salary threshold for workers who need sponsorship from £26,200 to £38,700 starting from spring 2024. This change is expected to have a significant impact on the hospitality industry. The basic salary, excluding tips, will mean that many companies sponsoring a chef de partie will not be able to sponsor new ones. Candidates who are in the UK now under sponsorship will not be able to move to a new company after May if the salary does not meet the requirements. Most sponsorships last up to 5 years but only for that one company, moving companies means a worker needs a new sponsorship. This could have a big impact for companies and also for workers, as they would need to stay with their sponsored company for the length of the sponsorship unless they are doing a job that is paying at least £38,700 basic salary. At the time writing this, the average salary in London is £32000 – £35000 basic and out of London is £30000 for a chef de partie.

It’s worth noting that the hospitality industry has already been struggling with a shortage of skilled workers, and this change could exacerbate the situation. However, according to a recent survey, hospitality wages have risen by 9.5% over the last year, compared with the national average of 6.6%. Pub wages are growing at the fastest rate within the sector, increasing by an average of 11.3%. Employees working in Greater London and the northwest of England also reported the highest pay increases. These figures on the hospitality sector come from a survey conducted by the company across 500 hospitality employers and 750 UK hospitality employees.

You might ask “What about the higher £38,700 salary threshold for the Skilled Worker visa – will that apply to people already here on that visa?”  The answer on the government website as of January 2024 is –  NO. “Those already in the Skilled work route, and applications made before the rules change, will not be subject to the new £38,700 salary threshold when they change employment, extend, or settle” [source]

For people who have a dependent coming over, The minimum income normally required to sponsor someone for a spouse/partner visa will rise in stages from £18,600 to £29,000 and ultimately around £38,700. This is the amount the person in the UK will be required to earn to bring someone over. 

Change 4: Flexible requests – expected from July 2024

The Employment Relations (Flexible Working) Act 2023 has completed its passage through Parliament and now has Royal Assent (27th July). There are several things it changes about the current flexible working regime and several (possible more notable) things that it does not. In terms of what it does change:

  • Employees will now be able to make two flexible working requests in any 12 month period.
  • Requests have to be dealt-with by employers within 2 months of receipt of a request if no extension is agreed.
  • Employers are not able to refuse a request until they have ‘consulted’ with the employee (although there is no legislative de minimis requirement of what that ‘consultation’ needs to include).
  • Employees will no longer, in their application, have to explain what effect the employee thinks agreeing to the request would have and how any such effect might be dealt with.

In terms of what it doesn’t do:

  • It doesn’t make flexible working a ‘Day 1 right’. Employees still need to have 26 week’s service before they are able to make a request. The Government has indicated that it will create Day 1 employment rights through secondary legislation – although none has appeared as yet. The issue is not covered in the Act.
  • It doesn’t require employers to offer a right of appeal if a flexible working request is rejected. The offer of a right of appeal is recommended in the ACAS Code of Practice on Flexible Working. These changes have not made it a requirement of the process.

There is no requirement that consultation with the employee is substantive or covers the options available. Indeed, there is no minimum standard of consultation set out at all.

What is flexible:

This could be your start time, your finish times, your working days, your hours on a set day, your lunch break.

It could be to have a longer lunch on a wednesday for a PT session in the gym. It could be a early finish on a friday to pick up the kids.  It could be starting half hour earlier then others in the team to avoid traffic.

What does a company need to consider?

A company will need to consider the impact on the business and customers. For example if you are in a call centre and the advertised opening hours are 8am, you can not start at 7am however if most staff start at 9am, you could request 8am.

What areas would not be included?

Location of the job. This is flexible working (ie start finish times). This is not about the location of the job. Therefore remote working would not be included, as this is a location not flexibility. The same as if your allocated to the Manchester branch, this would not change to being based in the chester branch a day week. Again, that is location ad a different subject

Home working or hybrid is not included,  this is not flexible this is place of work. See our guide about hybrid/remote/remoteonly working. Offering flexible working means the days, the start times, finish times, the breaks etc etc. If you have a hybrid option, you still need a flexible request to change any hours etc. For many companies who offer hybrid, the expectation is you still clock on and off at the same time and you have a suitable space to work in. You would still require child care for example with hybrid, so if this is a issue, you will need a flexible request about the finishing times.

Changing the opening hours of the business is also not included. If the company is Mon-Fri, you can not ask for a wednesday off ad work a saturday if the business is closed on a Saturday.

 

what might be classed as flexible requests;

  • later finish one day of the week to drop kids off at school
  • early start a day a week to finish early
  • longer days on some days for a shorter day another day
  • longer lunch to go to the gym on set days and work later
  • early finish a day a week to pick up the kids from child minder
  • unpaid leave during some school holidays or part time hours in some school holidays
  • shorter lunch break to finish early
  • extra breaks to make calls to overseas family members and work later instead

what might not be classed as flexible requests

  • the location of the work, for example if your in a office based business then hybrid is not always a option available.  hybrid is not flexible it is location. as hybrid is still doing the same job at the same time just a different location, thus it is not flexible in that sense
  • working outside of the business hours, if your sector does not require it.  for example a recruitment company needs to be available 9-5 for example, thus a 2pm to midnight flexible request would be turned down
  • request to work on days the business is closed
  • working and doing none work at the same time. for example walking the dog and being on a work team call   or going to the gym and on a team call   or  looking after a toddler and taking a client call at the same time. the last example for most companies would require part time work or to change the hours.

Change 5: Pensions

We will have a change to pensions, that new employees could request a current pension fund to be considered. No in-depth details of how this will work has been released yet (at time of writing this).

Change 6: Holiday pay and TUPE changes to come into force as early as 1 January 2024

Holiday pay for part-time and irregular hours workers has been reformed so their entitlement is calculated at 12.07 per cent of hours worked in a pay period. The reforms will also see changes to Transfer of Undertakings Protection of Employment (TUPE) rights, which protect employees and their benefits when their organisation transfers from one employer to another. The changes look to ease the pressure on small businesses by allowing them to consult with their new employees directly if there are no existing worker representatives in place. Where employee representatives – including trade unions – are in place, employers will be required to consult them.

Change 7: Miscarriage leave bill

The miscarriage leave bill looks to introduce three days of paid leave for people who have experienced baby loss before 24 weeks as, under current legislation, those going through the loss are not entitled to any paid leave.

Change 8: Carer’s Leave Act

The Carer’s Leave Act 2023 received royal assent in May 2023 and looks to cement the rights of those who balance work with caring responsibilities. It will allow these workers to take at least one week of unpaid carer’s leave per year. 

Change 9: Employee NI at 10%

The rate for Employee NI will decrease from 12% to 10% from early January.

In addition to all of this, we also have a general election, thus we might have some more changes coming. At the moment Labour have launched something called #NewDeal. This will cover a few areas, which needs to be planned. There is no date for this, they are saying a law will be put forward within 100 days but it can often take a while after that for the Lords and sign off. The working view is these would be more towards the end of 2025 if the general election was in Oct/Nov. Some areas that might be in this:

  • Ban on zero hour contracts. Like many years ago, everyone will need some hours on a contract,  this could be 4 hours a week, or a   number over a month or a year. The details are not out yet. You will need to start thinking how this will work for your business if you currently use zero hour contracts. 
  • Extra sick pay, there is currently no information who will pay for this, if you will be able claim it back or not, like in the past
  • Day one worker  rights.  Again no details on this.

 

HtE Recruitment News & Insights

This news and insights page has been written by Rick based on information on the government website and the autumn statement. Rates of pay quoted is correct on 17/11/22 and the rates do change each year. HtE Recruitment take no responsibility for this post.

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