Essential Employment Law Updates for Small Businesses in the UK

Staying compliant with employment law is crucial for UK small and medium-sized enterprises (SMEs). With legal frameworks evolving, business owners and HR professionals must stay updated on recent changes to avoid legal pitfalls and ensure fair workplace practices. In this article, we highlight key employment law updates for UK SMEs in 2024 and what they mean for your business.

1. Increase in National Minimum Wage

As of April 2024, the UK government has increased the National Minimum Wage (NMW) and National Living Wage (NLW). Employers must ensure that all workers receive the updated rates:

• National Living Wage (23 and over): £11.44 per hour
• 21-22-year-olds: £10.18 per hour
• 18-20-year-olds: £7.49 per hour
• Under 18s: £5.28 per hour
• Apprentices: £5.28 per hour Failure to comply could result in fines and reputational damage.

2. Changes to Flexible Working Rights

A significant reform in 2024 gives employees the right to request flexible working from day one of their employment. Employers are required to respond to such requests within two months and must have a valid reason for refusal. This change aims to enhance work-life balance and employee well-being, making it essential for SMEs to update their flexible working policies.

3. Enhanced Family-Friendly Rights

New laws introduce expanded rights for employees on parental leave:

• Extended paternity leave: Employees can now split their two weeks of statutory paternity leave into two separate one-week periods.
• Carer's leave: A new statutory right allows employees up to one week of unpaid leave per year to care for dependents.
• Redundancy protection: Pregnant employees and new parents will receive extended protection from redundancy for up to six months after returning from maternity, adoption, or shared parental leave.

4. Holiday Pay and Entitlement Reforms

Changes in holiday pay calculations affect workers on irregular or part-time contracts. From January 2024, employers must:

• Use the 52-week reference period to calculate holiday pay for workers with varying hours.
• Ensure all part-time and casual workers receive the correct holiday entitlements. These changes aim to prevent discrepancies in pay and ensure fairness.

5. Tightening of Workplace Harassment Laws

The Worker Protection Act 2024 introduces new employer obligations to prevent workplace harassment. SMEs must take proactive steps, such as:

• Conducting regular anti-harassment training.
• Implementing clear policies and procedures for reporting misconduct.
• Creating a workplace culture that discourages discrimination and harassment. Non-compliance can lead to significant legal and financial repercussions.

6. Right-to-Work & Immigration Compliance

As the UK continues to refine its post-Brexit immigration policies, SMEs employing foreign workers must:

• Verify employees’ right-to-work status using the Home Office’s online checking service.
• Ensure timely visa renewals to avoid compliance issues.
• Maintain accurate documentation to prevent penalties and fines. HR teams should regularly audit right-to-work processes to ensure full compliance with updated regulations.

7. Statutory Sick Pay (SSP) and Statutory Redundancy Pay Updates

The government has made adjustments to Statutory Sick Pay (SSP) and Statutory Redundancy Pay thresholds in line with inflation. Employers must:

• Review and update payroll systems accordingly.
• Communicate changes to employees to maintain transparency.

How Can SMEs Stay Compliant?

To ensure compliance with the latest employment laws, SMEs should:

✔ Review and update HR policies to reflect new legal requirements.

✔ Train managers and HR personnel on recent employment law changes.

✔ Use HR management software to automate payroll, leave tracking, and compliance checks.

✔ Seek expert advice from HR consultants or legal professionals when necessary.

Final Thoughts

Employment law updates can impact businesses significantly, and UK SMEs must stay ahead by adapting their policies and processes accordingly. Keeping employees informed, updating HR practices, and leveraging technology like HRMS software can help businesses remain compliant and foster a positive work environment.

For more insights on HR compliance and workforce management, contact Skilled Workers Cloud HRMS today!