Recent UK Employment Law changes are set to significantly affect both large organisations and SMEs operating across the UK and the EU, requiring them to review their operations, HR, and compliance strategies across the different jurisdictions.
We’ll look at three of these changes: increases in the National Minimum Wage (NMW) and National Living Wage (NLW); the introduction of rolled up holiday pay for workers with irregular hours and/or part-year contracts; and changes to flexible working requests.?
On 1st April 2024, the National Minimum Wage (NMW) increases and the National Living Wage (NLW) extends to younger workers.?
Both these directly impact labour costs for all organisations with operations in the UK. Large retailers which employ significant numbers of workers in various roles, are likely to see a substantial increase in such costs.?
The changes will inevitably lead to a re-evaluation of staffing levels and wage structures, and potentially increase the cost of services and products. ?In order to remain competitive without compromising labour standards, organisations will have to reconcile these increased costs with the wages in EU countries where they also operate.
Also with effect from 1st April 2024, UK legislation allows employers to make rolled up holiday payments to workers with irregular hours or part-year contracts.
This practice essentially means that employers can include a payment in lieu of conventional holiday pay in the regular pay packets of these workers.
Sectors with a high degree of employment variability, such as retail and technology, are likely to be most affected. The changes enable companies who have significant numbers of flexible contract workers to streamline holiday pay and also reduce administrative costs and financial unpredictability.?
However, implementation requires careful management to ensure compliance with both UK regulations and the varying holiday pay entitlements within the EU, where the concept and practice of rolled-up holiday pay may not be uniformly recognised.
From 6 April 2024, the right to request flexible working arrangements has been extended in the UK, so instead of waiting until they’ve worked for 26 weeks, employees can now request flexible working from the first day of their employment. Employees also have the right to make two requests (rather than just one) in each 12-month period.?
Companies which operate across the UK and EU will need to adapt their HR policies to offer greater flexibility. This is likely to impact workplace culture, recruitment strategies, and operational planning, as employees increasingly expect flexible working options.?
Companies will also have to ensure their policies are harmonised across jurisdictions, given the differences in employment law between the UK and EU member states. This will mean revising employment contracts, updating HR policies, and implementing systems to manage an increase in flexible working requests efficiently??.
Additional impacts
Companies will probably have to increase consultations with legal and HR people:
- to ensure their? policies and practices align with the new UK employment laws,
- to reassess their impact on operations within the EU, and?
- to plan their implementation across the different jurisdictions.
Operational adjustments may need to include automating processes or revising staffing models so as to manage increased labour costs and the demand for more flexible working arrangements.
Cross-border HR policy harmonisation will also be essential to develop and implement policies that comply with both UK and EU laws, and to ensure equitable treatment of employees across jurisdictions.
These changes highlight the need for international companies to be even more agile and responsive to legal and regulatory changes in their operating environments and to prepare for further such change in the years ahead.?
