In the world of employment law, nothing stays the same for long and with April and October always being the significant months for employment law, we take a look at the changes that all employers need be aware of.
Right to Work checks from 1st October 2022
In response to the COVID-19 pandemic, from March 2020 the way in which employers were required to check that all new members of staff had the right to work in the UK was relaxed. It simply wasn’t possible to inspect original documents when such a large number of employers were operating remotely and staff were joining without physically meeting their colleagues. This short term relaxation has now been removed and from 1st October 2022, employers will need to revert to the original way in which manual in-person checks on their new employees’ were made. However, it has been confirmed that retrospective checks will not be required for any employees who started employment during the pandemic and whose right to work checks were completed in line with the COVID-19 adjusted checks guidance.
This now means that when making an offer of employment, employers will need to make it clear that they will need to see original documents such as passports and it will no longer be possible to accept scanned copies of documents or to inspect them on video calls.
In most cases, employers will need to:
1. Request the prospective employee’s original documents
2. Inspect the original documents in order to be satisfied that they are valid and relate to the prospective employee who should be present at the time
3. Take copies of the documents and keep those on the personnel file whilst also keeping a record of the date that the check was made.
Alternatively, for any prospective employees that have certain biometric permits or e-visas, the Home Office online right to work checks can still be completed using the share code provided by the prospective employee.
This change may impact those businesses that as a result of the pandemic now have a fully remote workforce but it is important that all employers remain compliant in order to avoid illegal working. The consequences of non compliance include fines of up to £20,000 per individual who is working illegally and has not had the correct right to work checks carried out along with potential criminal prosecutions. By carrying out and keeping accurate records of the right to work checks that have been completed on all prospective employees (before their employment starts), employers will have a statutory excuse that can be used to avoid civil penalties.
Further Employment Law changes as a result of the mini budget
The mini budget at the end of September also saw a raft of changes introduced (some of which have already been reversed) but here are some of the changes to look out for in the coming months:
· 6th November 2022 – the recent increase by 1.25% to National Insurance will be reversed.
· April 2023 – the basic rate of income tax will be reduced from 20% to 19%
· 6th April 2023 – the IR35 off payroll working rules that applied to both the public and private sector will be reversed.
IR35 reforms - off payroll working rules scrapped from April 2023
The changes to the off payroll working rules will be welcome news for ‘end-user’ clients who engage with contractors through personal service companies (PSC). It now means that the onus on making an assessment of employment status and paying the correct income tax and National Insurance Contributions will fall back to the PSC rather than the end-user having the responsibility to complete a Status Determination and facing the income tax and National Insurance liabilities.
Following the introduction of the off payroll working rules, many businesses decided not to engage with contractors in this way simply to avoid the risk and the administrative burden that it placed on them. However, from April next year, businesses may choose to re-assess their use of contractors and should start to plan how this may affect their business model going forward. As always, having the right documents in place will be key, so contractor and consultancy agreements will need to be revisited and updated.
If you have any questions about staff pay and benefits and how to stay compliant when onboarding new members of staff, please contact Julie Edmonds, Head of Employment, by email email@example.com, telephone on 0207 644 7286 or contact her on LinkedIn.