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

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

Change 5: Pensions

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

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.