Employment law for salons and barbershops - 2020/2021 updates

Salons and barbershops must understand and comply with the latest employment laws following two court cases and fresh legislation. Brexit will also affect employment law.

This blog post covers: 

• Getting legal advice
• Brexit
• New NMW and NLW rates and rules
• Jack's Law - paid bereavement leave
• Keeping detailed records of working hours
• New employees: day-one rights to written terms and conditions
• Holiday pay calculations
• Coronavirus and annual leave
• Off-payroll working – new rules
• Checklist

Brexit

Employees from the EU 

If you have employees from the EU, they may need to apply to the EU Settlement Scheme. It’s free to apply.

Taking on new employees

A new immigration system will apply to people arriving on or after 1 January 2021.

A UK points-based immigration system was started on 1 January 2021. Employers will need to register as a ‘licensed sponsor’ to hire eligible employees from outside the UK. Anyone you want to hire from outside the UK, excluding Irish citizens, will need to apply for permission in advance. 

Find detailed information about employment law following Brexit. 

New NMW and NLW rates and rules 

As well as increases in the NMW (National Minimum Wage) and NLW (National Living Wage) from April 2021, the NLW will, for the first time, have to be paid to those aged 23 and 24.   

Employers should update their payroll to ensure that the NMW/NLW increases from 1 April 2021 are taken into account. The pay increase should also be confirmed in writing. 

Furloughed staff will not receive the increased rates until they return to work. However, staff must be paid the new NMW and NLW rates for any periods of time they have completed training at the employer's request while on furlough.

Find more details about the new rates and rules in our blog post. 

Jack's Law - paid bereavement leave

Parents in the UK who lose a child are now entitled to two weeks’ paid bereavement leave. This came into force in April 2020.

The new law, known as 'Jack's Law', applies to parents who lose a child under the age of 18 or who suffer a stillbirth from 24 weeks of pregnancy. They will be able to take bereavement leave as a single block of two weeks or as two separate blocks of one week during the first year after the death. All employees will have this right, irrespective of how long they have worked for their employer. 

Keeping detailed records of working hours

A ruling in the European Court of Justice introduced stricter rules for recording the number of hours your employees work. 

You must now keep an accurate record of the hours your employee works every day including any overtime hours.

This new ruling will still apply post-Brexit.

Day-one right to a written statement of employment details

Since April 2020, a new employee must be given a written statement that includes all the terms and conditions of their job on the first day of their employment.

NHBF Members can use free contracts and staff handbooks which cover this new legal requirement.

New holiday pay calculations

A ruling in the Court of Appeal has changed the way that employers must work out holiday pay in some cases.

The ruling relates to employees who volunteer to work overtime on a regular and ongoing basis.

The new ruling states that payments for regular overtime must be taken into account when calculating holiday pay.

Coronavirus and annual leave

The government introduced emergency legislation which says that employees can carry over up to four weeks’ (20 days for those who are full time) paid statutory annual leave where it was not reasonably practicable to take it as a result of the effects of the coronavirus outbreak. This is to ensure that employees who could not take their statutory annual leave due to coronavirus will not lose it. Find out more on the government website.

Off-payroll working rules (IR35)

New off-payroll working rules will apply from April 2021 (the changes were originally due to come into force in April 2020). However, it’s unlikely that this 'IR35' tax law will affect salons or barbershops.

Off-payroll workers are not paid via a company’s PAYE system. For example, they could be freelancers or consultants who are normally hired for a set amount of time or to complete a particular project.

The new rules apply to off-payroll workers who offer their services via a personal service company (PSC). This is a limited company for one person. From April 2021, companies who receive services from off-payroll workers will be responsible for ensuring tax rules in relation to off-payroll workers are complied with. The aim is to reduce tax avoidance.

Checklist

• Always get legal advice if you are unsure about any aspect of employment law.
• NMW and NLW rates and rules have changed from April 2021.
• Make sure you understand how Brexit affects employment law.
• You need to keep detailed records of the hours your employees work every day.
• Employees are entitled to written details about their terms and conditions of employment from the day they start work with you. Members can use the NHBF's free contracts and handbooks to cover this.
• Regular, ongoing overtime must now be included in holiday pay calculations.
• New off-payroll rules have come into force – but these are unlikely to affect salons and barbershops.