The Retailer Spring_09.05_FA

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The Good Work Plan Roundtable – Key Takeaways

Fionnuala Horrocks-Burns Employment and Skills Policy Adviser British Retail Consortium

National Minimum Wage - PwC highlighted the recent change in enforcement around NMW and the likely scope for changes under the current consultation. They noted the Government’s preference for extending the approach to NMW enforcement by HMRC (targeting businesses, 200% penalties etc) to Holiday Pay. Agency workers – From April 2020 employers will no longer be able to engage agency workers on Swedish Derogation contracts. In retail these contracts are typically used in the distribution function and contractual changes will come at a cost. The key question from retailers is how to ensure compliance going forward, particularly where contracts are already in place that go beyond 2020. Holiday pay – The reference period will change to a 52-week period and the government have confirmed their intention to enforce holiday pay on similar terms as the NMW is enforced. For retailers, there are some immediate practical steps to take including; liaising with payroll providers to prepare for the change in reference period and whether to apply these rules just for the EU qualifying holiday or all holidays. Businesses should start planning now to ensure they are compliant. Claims for underpaid Holiday Pay extend back 2 years and potentially 6 years under any new enforcement regime. PwC have developed tools to help employers ensure compliance. Hours on payslips - As of April 2019, the existing statutory right for employees to receive an itemised payslip will be extended to all workers, not just employees. This change only applies to workers whose pay varies in relation to the hours they work. For the relevant population, it will be necessary to: record the number of hours relating to the variable pay (which may not necessarily be all hours worked), show the hours as either a total figure, or, split out into separate figures for differing types of work or differing rates of pay. The devil will be in the detail and any employers who have not already, should discuss this change with their payroll providers. Day 1 rights - The right to a written statement will become a day 1 right for all employees and workers. Retailers will need to build this into new offers and employment contracts to ensure compliance. The sequencing of activities before and up to day 1 will take on a new significance. IR35 – Although this was not part of the Government’s Good Work Plan, this significant change is coming in from April 2020 and retailers should take the time now to better understand what this will mean for their business operations and costs as well as the risks of failing to comply. As a first step retailers should begin to identify those contractors who are engaged via IR35 companies, and consider how they want to engage with that individual going forward. Again PwC talked about the range of tools that are available to help employers understand who might need to be considered and then how to determine if the new IR35 rules apply to them. For more information please contact the BRC or John or Anna from PwC

THE GOVERNMENT’S GOOD WORK PLAN RUNS TO 68 PAGES, TAKES FORWARD 51 POLICY RECOMMENDATIONS AND FOR ANY INDUSTRY WITH A LARGE WORKFORCE WILL MEAN SIGNIFICANT CHANGE WHICH CREATES COSTS AND RISK. At the heart of the Plan is an ambition to put quality work on a par with quantity of work. Well intentioned policy recommendations, designed to rebalance the employer-employee relationship, are difficult to disagree with in principle. But in practice, some of these recommendations will have broad consequences for those employers already striving to deliver quality work that suits colleagues’ needs. Extending workplace rights is not the traditional space for a Conservative government to act. But given the PM set out her stall to tackle the burning injustices across the economy in 2017, it is perhaps no surprise that the package of measures stacks up to be a relatively comprehensive set of new rules and responsibilities for employers. Although some of the measures have a long lead, the new regulations do not take force until April 2020, the issues are complex and have the potential to be costly. Earlier this month we brought John Harding and Anna Vishnyakov, employment and tax specialists from PwC together with 20 leading retailers to unpick the detail of the Good Work Plan. This session looked at what it will mean for the industry, and how they could get their businesses ready. What follows is what PwC believe are the key changes and what retailers should really be thinking about now.

54 | spring 2019 | the retailer