Article 5 employment law changes to prepare for in 2024

2024 is set to be a significant year for workplaces as several new employment laws are expected to come into place. It’s important that you’re ready for these changes, so you can provide your employees with the correct information and support.

In this article I’ll explain 5 new employment laws you should start getting ready for:

• Increase in the National Living Wage (over 23s)
• Pensions (Extension of Automatic Enrolment) Act 2023
• The Carer’s Leave Act 2023
• The Neonatal Care (Leave and Pay) Act
• The Protection from Redundancy (Pregnancy and Family Leave) Act

1. The National Living Wage is increasing

Each year the Low Pay Commission, an independent public body, advises the Government on the rates of the National Living Wage (NLW) which increases annually from each 1 April. Employees aged 23 and over are entitled to the NLW, which is currently £10.42 an hour.¹

In 2019 a new target for the NLW was to reach two-thirds of median earnings by 2024. And in October, the Chancellor committed to accepting the Low Pay Commission’s recommendations. This is due to be formally announced in November 2023 – it’s expected that the NLW will rise to at least £11 an hour.²    

Key takeaways:

• The National Living Wage will rise to two-thirds of earnings from 1 April 2024.
• This is expected to be at least £11 an hour – based on government forecasts this means 2 million workers will receive a pay increase of over £1,000 a year.
• The National Minimum Wage for under 23s and the Apprentice rates are also expected to also increase. These will be confirmed in November 2023.  

2. Pensions (Extension of Automatic Enrolment) Act 2023

This is an enabling Act which sets the wheels in motion to widen the scope of employees eligible for pensions auto-enrolment. It follows recommendations made by an independent review in 2017. The government has not yet announced when the changes might be implemented.   

Currently you have to auto-enrol eligible workers into your workplace pension scheme from their 22^nd birthday up to State Pension Age. This is provided they earn at least £10,000 a year in a single job (known as the earnings trigger) and are normally a UK resident. Once in a workplace pension scheme, your employees benefit from a statutory total minimum pension contribution of 8%.

Rather than being based on full earnings, auto-enrolment minimum contributions are payable on qualifying annual earnings between £6,240 and £50,270. As an employer, your contribution must be at least 3%, with the balance paid by your employee, including any government tax relief. This is just the minimum that must be paid, it's possible for employers and employees to contribute more than this.

The new Act allows for the minimum age for automatic enrolment to be lowered and for the reduction or removal of the minimum earnings threshold of £6,240.³

Key takeaways:

• The Act allows the minimum age to be reduced from age 22 to age 18. This would enable younger employees to automatically start saving earlier and benefit from your employer pension contributions.³
• It allows the reduction or removal of the £6,240 salary offset, so that contributions are based on earnings from either a lower limit, or the first £ earned.³ This means that auto enrolment contributions could go up by almost £500 a year, with employer contributions increasing by just over £187 a year for each employee if the lower earnings limit is completely removed.

The Government is expected to consult shortly on the implementation of the reforms. The removal of the salary offset is expected to be on a phased basis, possibly over 3 years, from April 2025, at the earliest. It’s possible that the reduction in the age eligibility will be implemented all at once, rather than on a phased basis.

Note: no change to the £10,000 a year earnings trigger has been announced.

Rather than waiting for the reforms to be implemented, you may wish to consider the option of using contractual enrolment rather than auto-enrolment for new employees. This means that instead of working out which employees need to be auto-enrolled into your pension scheme, all new employees would be eligible. As a result, your younger employees would benefit from earlier inclusion into your pension scheme.

This method requires getting consent from employees before enrolling them into your scheme. You can read more about contractual enrolment in this guide from The Pensions Regulator.  

3. The Carer’s Leave Act 2023

This new law will give employees a statutory right to have up to one week of unpaid carer’s leave in a period of 12 months to care for a dependant. Currently there’s no dedicated statutory leave for informal carers.

The Act will help support employees who are juggling with taking care of dependant family or friends who need long-term care, alongside their work responsibilities. The Government has estimated that this new right will benefit over 2 million employees in the UK.⁴ The reforms are part of the Government’s wider agenda to support more employees to stay in work.

As the UK population ages, increasingly more people will live with illness and disability. More employees will be caring for loved ones, often long before they reach retirement. According to Carers UK the average person has a ‘50:50 chance of caring by age 50, with half of women caring by age 46’.⁵ The Act is expected to become effective possibly as early as April 2024. To find out more about how you can prepare, read this guide from Carers UK.

Key takeaways

• Carer’s Leave will be available to eligible employees from the first day of their employment.
• Employees will have the right to take one week’s unpaid leave every 12 months,  flexibly to suit their caring responsibilities for any type of long-term care. They won’t have to provide evidence of how or for whom it will be used.  
• The leave can be taken in one go or spilt into chunks.
• Employees taking Carer’s Leave will be protected from dismissal or any detriment a as result of taking time off that are associated with other family-related leave.   

4. The Neonatal Care (Leave and Pay) Act

This Act allows employed parents of babies, aged 28 days or less, who are admitted to neonatal care the right to paid leave, if the baby is in hospital for a continuous period of 7 days or more. The Act is expected to become effective in 2024.

Key takeaways:

• Employed parents can take up 12 weeks of paid leave, in one block, at the end of maternity or paternity leave.
• It’s in addition to other leave and pay entitlements such as maternity and paternity leave. 
• The leave will be available from day one of employment. 
• Statutory neonatal pay will be subject to 26 weeks’ service and earning above the lower earnings limit (currently £123 per week).

5. The Protection from Redundancy (Pregnancy and Family Leave) Act

This act extends the current protection provided to employees on maternity leave during redundancy and is expected to become effective in 2024.

Key takeaways:

• Employers must already offer those on maternity leave, and at risk of redundancy a suitable alternative vacancy – where one exists.
• The Act will extend this right to those on adoption leave and shared parental leave. 
• The protection will apply from the point the employee informs the employer that she is pregnant, whether verbally or in writing, and will end 18 months after the birth.

Next steps

More detail about each of these new laws is expected to be published in the coming months, including effective dates. These are significant changes, and you should use the time now to understand and prepare for the new laws. This includes communicating to your employees of their new rights and making sure that processes are updated to remain compliant.