Swedish Derogation contracts to be abolished

Swedish Derogation contracts will be abolished from 06 April 2020 and by the end of April 2020, all Swedish Derogation employees will be entitled to equal pay.

Access to a key facts document

In order to increase transparency in the recruitment supply chain, the government will introduce a right for agency workers to receive a ‘key facts’ document at the point of registration (before a contract is signed). This will contain the following information:

• Contract type
• Minimum pay
• How the worker will be paid
• If the worker will be paid through an intermediate company
• Any deductions, and how these will impact the worker’s pay
• Greater focus on awareness and enforcement of holiday pay

Many workers aren't aware of their entitlement to holiday pay, and some employers don't pay workers the holiday pay they are due. The government have therefore announced the following:

• State enforcement will now include underpayment of holiday pay
• There will be an campaign, targeted at workers and employers, to boost awareness and understanding of holiday pay
• New guidance to support the interpretation of holiday pay rules
• Holiday pay reference period will be extended from 12 weeks to 52 weeks

IR35

From April 2020, IR35 legislation will change in the private sector and will mirror what is already happening in the public sector. It will become the client's responsibility to determine the IR35 status of a PSC (it is currently the PSC's responsibility). Liability for the incorrect payment of tax and NI will sit with Acorn (the party that pays the PSC) unless the client has failed to provide a correct IR35 determination. This will have huge implications for the contracting industry.

National Minimum Wage and National Living Wage increase

The Government has announced that the National Living Wage (NLW) for over 25's will increase to £8.72 from 01 April 2020.

This is a 6.2% increase; the highest ever % increase.

It is predicted that approx. 3 million workers will benefit from this increase.

The National Minimum Wage (NMW) rate for 21-24 year olds will increase from £7.70 to £8.20 an hour (6.5% increase).

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