the good work plan webinar · 2020-04-13 · background –the good work plan in context it is...

The Good Work PlanWebinar

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26 February 2019

With you today

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Document Classification: KPMG Public

© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Donna Sharp

Director and Solicitor,Employment Legal Services

Emily Salathiel

Director,Employment Solutions

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What will we cover?

Agenda

Background

Top 10 things to note from the Good Work Plan

The bigger picture and practicalconsiderations

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Background – the Good Work Plan in contextIt is important to see the Good Work Plan in the context of a number of other developments in pay compliance and pay transparency.

“Good work”

2016

1 Oct 2016

Taylor Review Commissioned

2017

6 Apr 2017

Gender Pay Gap reporting regulations come into effect.

First year of reporting completed by 5 April 2018

6 Apr 2017

New Public Sector rules on off-payroll

working introduced

May 2017

Conservative Party Manifesto includes commitment to “make sure that people

working in the ‘gig’ economy are properly protected”

Jul 2017

Taylor Review on Modern Working Practices published

2018

Feb 2018

Government response to the Taylor Review and launch of 4 consultations

Dec 2018

BEIS Good Work Plan published

2019

Jan 2019

Regulations relating to CEO Pay Ratio

Reporting come into effect, with reporting

to start in 2020

Jan 2019

Consultations on ethnicity pay gap

reporting and specific elements of

NMW legislation

6 Apr 2019

All workers to receive payslips to show hours worked

where pay depends on this

6 Apr 2019

Increase in max. aggravated damage award

comes into effect

2020

6 Apr 2020

A number of aspects of the

Good Work Plan take effect

6 Apr 2020

Off-payroll rules to be extended to the private

sector

Other pay compliance / transparency

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1. Employment status

The Government will undertake two key actions:— Legislate to ‘improve the clarity’ of the employment status

tests; and — make detailed proposals on how to align the employment

status test for employment rights and tax.

Key points:

Less uncertaintyConcept of worker to be retainedLess emphasis on substitution. More emphasis on controlImproved guidance and online tools to be introduced

To be confirmed:

When changes will come into effect;The detail of what the new tests will be. How the changed test will be reflected in HMRC’s Check Employment Status Tool (CEST) The interaction with off-payroll working changes

2. New enforcement agency

A new single labour market enforcement agency has been proposed.

Key points:

To combine a number of areas of enforcement including: 1. national minimum wage (NMW)2. statutory sick pay3. holiday pay4. working timeBuilds on recent NMW enforcement by HMRCProposals for this will be put forward in ‘early’ 2019

To be confirmed:

How it will be constitutedWhen it will come into being

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3. National Minimum Wage (NMW)

NMW legislation is not going to be amended to take account of gig economy workers.

Key points:

No change to the law – this is unsurprising

To be confirmed:

Interaction, if any, with current consultation on some specific aspects of the NMW Regulations

How will gig economy workers be protected?

What is ‘working time’ for NMW purposes in the gig economy. Will further guidance be issued. This was a key aspect of the Taylor Review.

4. Holiday pay

Key points:

reference period for average week’s pay extended to 52 weeks

This will come into force on 6 April 2020

(as mentioned above) new enforcement agency for holiday pay rights

To be confirmed:

New government guidance & improved holiday entitlement calculator

The nature of enforcement powers and accompanying penalties

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5. Continuous service

Period of time to break continuity of service will be extended to 4 weeks.

Key points:

Will impact rights for low pay/zero hours/uncertain hours employees

No impact for ‘workers’

Will be effected by the introduction of legislation

To be confirmed:

When this will come into effect

Whether there will be consultation on the draft legislation

6. Right to request a more predictable and

stable contract and receive written terms

1. All workers and employees to be able to request a more fixed working pattern after 26 weeks of service.

2. All employees, workers and agency workers will be entitled to a written statement/ ‘key facts page’ on day one.

Key points:

‘Fixed working pattern’ could be fixed number of hours or fixed days

Right to written statement will come into force on 6 April 2020

To be confirmed:

When employer can refuse a request for fixed working pattern

When right to request a more fixed working pattern will come into effect

Top 10 things to note from the Good Work Plan 7. Agency workers – ban on –

Swedish derogation

Ban on the Sw edish derogation (allowing ag ency workers to opt out of the right to equal pay with permanent employees in return for guaranteed pay between assignments)

Key points:

Change was expected

Significant impact for employers currently relying on it currently

Some employers (particularly staffing agencies) will need to change their engagement model

Will come into effect on 6 April 2020

8. Tips

The Government will ban employers from making de ductions from staff tips

Key points:

Employers will no longer be permitted to deduct administrative fees for administering tips

To be confirmed:

When this will take effect

The impact on current tips schemes and systems

9 © 2019 K PMG L LP, a U K li mli itei d li alibiliitly i partnershipi a nd a m ember fi rm o f th e K PMG n etwork of in idependent m ember fi rims affiliial ted with K PMG In ternational C ooperative ( “K“PMG In ternatioinal”l)”, a S wiss i entity.i A ll r ights reserved.


Top 10 things to note from the Good Work Plan 9. Aggravated penalties for

employers

The maximum aggravated breach penalty will increase to £20,000 for employers who have breached their obligations

Key points:

Increase from £5,000 to £20,000

Part of broader project to modernise the Employment Tribunservice and make it easier to enforce tribunal awards

In force from 6 April 2019

al

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10. Information and consultation

The threshold to request information and consultation arrangements reduc ed from 10% to 2% of employees.

Key points:

Unlikely to have a significant impact as this right is rarely used

Existing minimum of at least 15 employees will remain

In force from 6 April 2020

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The bigger picture and practical considerations

© 20 19 KP M G L lL iP i, a U liK li im liited liability ipa rtne rsh ip and a me mb er f irm of t he KPMG n ietwork of ind ependen t imembe ilr firms affil iated w ith KPMG Inte rnational Co o “perative (“KPMG i Int le ”rn a tion ial”), a iSw i ss entity. All rights reserved.


The bigger picture ─ The Good Work Plan is part

of a larger set of

measures focusing on increased pay compliance and pay transparency

─ But do all these measures

hang together?

─ Perhaps not (at least without further details) Unclear

timing?

Unclear

operation?

Continuing conflict

between legal and tax

status tests?

Conflict between

enforcement

agencies/ HMRC?

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13 li i li ili i i i il “ i l” i i © 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


Practical considerations for employers

Despite uncertainty on some proposals, employers can take proactive steps now to help understand the potential impact o f changes on their workforce:

—— Are your payroll systems able to cope with changes to payslips and holiday pay calculations?

—— How do you engage contractors? How are they taxed?

—— Do you engage agency workers using the Swedish Derogation?

—— Have you reviewed NMW and holiday pay compliance?

—— Do you need to review how tips/ TRONC are distributed to employees?

—— Do your recruitment processes allow you to issue employee information on day one?

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Strategic approach to managing pay compliance

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Understand your obligations

1. What are the rules?

2. How do they apply to your organisation?

3. What are your risk areas?

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Get your data ready

1. Can you obtain all the data you need from yourHR, payroll and Finance systems?

2. Is the data accurate?

3. Do you understand it?

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Involve key stakeholders

1. Who understands the workforce and data?

2. Who will sign off on the strategy?

3. Understand your internal and external audiences

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What next?

1. Develop an action plan (historic and future fix)

2. Implement it

3. Monitor it

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Strategic considerations – methodology

em

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01 Assess

• Assess obligations andregulation change

• Identify stakeholders • Review procedures and syst

configurations 02 Understand

• Facilitate workshops to understand the detailed requirements against yourbusiness model

• Utilise data analytics to understand the impact• Understand the implications for talent management, resourcing and costs• Check if your systems enable you to comply and are fit for purpose

03 Diagnose

• Identify any high risk population• Review policies, procedures

and working practices• Consider what system changes

are needed• Develop communication

strategy• Establish governance new

procedures

04 Respond

• Develop an action plan• Model costs of any changes to

workforce structure• Test and implement changes• Manage stakeholders and

budgets• Initiate communication plan• Perform ongoing audit process

to check compliance

© 2019 K PMG L LP, a U K lim li itei d lia l bi iliti y li partnership i an d a m ember fir m of th e K PMG n etwork of in di ependent m ember fir mi s affiliail ted with K PMG In ternational C ooperative (“ K“ PMG In ternationi al”)l , ” a S wiss i entity. i A ll rl i ghts reserved.


Questions?

Thank you!

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the good work plan webinar · 2020-04-13 · background –the good work plan in context it is...

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