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Home / News and Insights / Blogs / Employment Law / 217: And finally a look forward to what’s happening in employment news for February 2020

HMRC has released an updated ‘Check Employment Status for Tax’ (CEST) tool, which is used to assess whether an individual should be classed as employed or self-employed for tax purposes, and to assist in compliance with IR35. CEST is the only tool which produces a result that HMRC will stand by, provided that it has been used in accordance with the technical guidance. The update takes account of decisions and settled cases on employment status since CEST was originally introduced in March 2017, and improvements have been made to around 30 of the questions. These changes have been made in advance of the off payroll working rules, which currently apply to the public sector, coming in to force for medium-large companies in the private sector on 6 April 2020. Consequently, employers should be checking the employment status of ‘contractors’ as soon as possible so that the necessary processes are in place prior to implementation of this new legislation.

The government has published a revised holiday entitlement calculator and updated guidance on calculating holiday entitlement for part-year workers. The calculator was taken off its website in August 2019 following the case of Brazel v The Harpur Trust. In the case, the Court of Appeal held that the accrued holiday entitlement for a part-year music teacher should be calculated in accordance with the 12 week averaging calculation under Regulation 16 of the Working Time Regulations 1998 and section 224 of the Employment Rights Act 1996. Prior to this, it had been widely accepted, and stated in ACAS guidance, that statutory holiday entitlement of 5.6 weeks equated to 12.07% of hours worked over a year for these workers. Reference to the calculation of 12.07% of hours worked has now been removed from the guidance. Going forward, although the decision in Brazel only affects part-year workers on permanent contracts, other workers, such as zero hours staff on permanent contracts, may now seek to challenge the 12.07% calculation method.

The government has published an independent review of international evidence on the impact of minimum wages, together with recent research on the impact of the National Living Wage (NLW) in the UK. This review was commissioned in order to inform the government’s decisions on the future remit of the Low Pay Commission beyond 2020. The report notes that research from the US, the UK and other developed countries points to minimum wages having only a very minimal effect the level of employment, but significantly increasing the earnings of low paid workers. Based on this evidence, the report concludes that the UK could have a more ambitious NLW target in the coming years, in the range of 60% to two-thirds of UK median hourly earnings. The government has subsequently announced that the NLW for over-25s will increase by 6.2% from £8.21 to £8.72.

The Hampton-Alexander Review has published its fourth annual report on female representation at senior levels of UK business. This states that the proportion of women on FTSE 250 boards has risen by nearly 5%, whilst in the FTSE 350 there are now only two all-male boards. The report also predicts that the FTSE 100 is likely to meet the target set by the Review of 33% female representation by 2020. Women now hold 32.4% of FTSE 100 board positions (up from 30.2% in 2018), although 51 FTSE 100 companies have not yet achieved the 33% target. Women now hold 29.6% of FTSE 250 board positions (up from 24.9%) but 139 FTSE 250 companies have not yet achieved the 33% target. In addition, women also now hold a marginally increased number of chairperson, senior independent director and CEO roles.

The Information Commissioner’s Office has published detailed guidance on how to handle ‘special category data’ under the EU General Data Protection Regulation. This data includes information about health, sexual orientation, racial or ethnic origin, political views, religious or philosophical beliefs, trade union membership, and biometric and genetic data. It sets out the rules governing special category data, the conditions for processing it and the substantial public interest conditions, as well as the documentation requirements and practical examples. The new guidance should be helpful to Data Protection Officers and those with data protection responsibilities in larger organisations.

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