As we move into 2023 it’s important to be aware of changes that came into force in December 2022 and forthcoming changes to statutory rates that some employers may have missed:

The Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022

These make exclusivity clauses unenforceable in employment contracts where the average net guaranteed weekly income is below or equivalent to the Lower Earnings Limit, currently £123 .00 per week. 

The legislation came into force on 5 December 2022, but the title of the Regulations is perhaps misleading as they are not really about zero hours contracts! The reality is that since May 2015, exclusivity terms have been unenforceable in zero hours employment contracts. The problem which has arisen is that many low paid employees or workers are not employed on zero hours contracts (but perhaps a permanent part-time contract) and they could still be subject to exclusivity provisions. 

With the aim of ensuring that these low-income workers are also not restricted by exclusivity terms, the Regulations now extend the protection to all employees and workers working under contracts which entitle them to net average weekly wages that do not exceed the lower earnings limit.

This change means the lowest paid workers will be given the choice to work multiple jobs if they wish, to give them more flexibility over when and where they work.

Increase to National Living Wage and National Minimum Wage

Employers must comply with the new National Living Wage and National Minimum Wage rates from 1 April 2023.

The new rates will be:

•                 National Living Wage: £10.42 (from £9.50)

•                 Age 21 to 22: £10.18 (from £9.18)

•                 Age 18 to 20: £7.49 (from £6.83)

•                 Age 16 to 17 and Apprentice: £5.28 (from £4.81)

Increase to Family Friendly and Sick Pay Rates

Statutory maternity (SMP), paternity (SPP), adoption (SAP), shared parental (ShPP) and parental bereavement (SPBP) pay will increase from the current rate of £156.66 per week to £172.48 per week with effect from 2 April 2023.  The minimum weekly amount an individual must earn to be entitled to these payments will remain at £123.00.

Statutory sick pay will rise to £109.40 per week, up from £99.35 per week with effect from 6 April 2023.

Employers who have employees on sickness absence, or maternity leave etc. in the run up to April 2023, must remember to factor in the increases for these employees where their absence continues past the rate change date, as well as employees who go on sick leave, maternity leave etc. after the new rates are in place.

Compensation limits, statutory guarantee pay and weekly redundancy payments

We are awaiting confirmation of the new rates, which are likely to be confirmed in March 2023.

Pensions Auto Enrolment contributions

These remain unchanged at 8% minimum total contributions (3% employer / 5% employee).

Extra Bank Holiday

With the coronation of King Charles III taking place on Saturday 6 May, an extra bank holiday has been announced for Monday, 8 May 2023.

This celebratory bank holiday has been confirmed by the government and means that there are three bank holidays in May this year: Monday 1 May, Monday 8 May and Monday 29 May.

Like with similar ‘extra’ bank holidays granted previously, it is unlikely that there will be an ‘enforced closure’ of shops and businesses, although schools will almost certainly be closed (which may make child-care problematic for parents required to work).

The wording of the contract will be crucial in determining the entitlement of staff. What does this say about entitlement to bank holidays? Does this allow the employer to ask staff to work on a bank holiday? If so, do they get a day-off in lieu? In many cases, the decision to grant an additional day-off (or time off in lieu) will be at the employer’s discretion. However, the approach taken to the ‘additional’ bank holidays granted for the Jubilee and Queen’s funeral may also be relevant to establishing custom and practice arguments.

New Legislation in the pipeline

There is a raft of further changes due to come into force during 2023, including the day 1 right to make a flexible working request and statutory carer’s leave.  We’ll publish further details as soon as these changes are announced.

In the meantime, if you need any further information or advice, please don’t hesitate to get in touch.