The changes that small businesses could face in 2024

Updates to employment legislation that could impact your small business

Our insurance brokers work with small business owners every day, that’s why we understand the pressures that small business owners face. Keeping on top of changing laws and legislation is yet another task that owners of SME’s need to keep track of. Whilst larger companies may employ entire legal teams to keep up with these changes, for many small businesses this simply isn’t cost effective and therefore the responsibility to remain up to date falls to them.

In this guide, we aim to take away some of the stress by highlighting some of the major changes that could impact your small business in 2024.

What’s new for 2024

Although there are no major employment law changes planned for 2024 at the moment, there are some subtle changes which might impact the way your business manages its people.

A clarification to the Employment Rights (Amendment, Revocation and Transitional Provision Regulations) 2023 states that employers are no longer required to record the time worked by each employee each day, but should maintain ‘adequate records’ to prove the business is compliant with the statutory minimum rest breaks set out in the law. See more detail here.

From the 1st of April 2024, under the same piece of legislation, holiday entitlement for irregular hours workers and some part time staff should be calculated at 12.07% of hours worked during a set pay period. Also from April, rolled-up holiday pay for irregular hours workers and some part time staff will be made lawful.

What is rolled-up holiday pay?

Rolled-up holiday pay is when an employer will pay an employee an additional amount on top of their standard wage to represent holiday pay for a set pay period, instead of paying the employee at the time annual leave is taken.

Changes to the National Minimum Wage

The National Minimum Wage will increase from the 1st of April 2024. Employees aged over 21 will be entitled to at least £11.44 per hour, the top line minimum wage will now be required for all staff over 21 years old, where previously only those over 23 would be entitled to this.

Employees aged at least 18, but under 21 years will be entitled to £8.60 per hour, increasing from £7.49. Staff aged between 16 to 17 will be entitled to £6.40 per hour, rising from £5.28. The minimum wage for apprentices will rise to £6.40 per hour, up from £5.28.

The Carer’s Leave Regulations come into force on the 6th of April 2024, this means that all employees who provide or arrange care for a long-term dependant will be entitled to an additional week of unpaid leave per year. Some businesses may wish to offer more than this, however once the regulations come into force, at least one week of unpaid leave per year for these individuals will become a legal requirement, so long as they meet the criteria outlined in the legislation.

Parents on maternity leave will be granted new protections on the 6th of April 2024 which extends the period that they are protected from redundancy whilst on maternity or shared parental leave. Whilst there are some conditions to this change, the general rule is that parents should be protected from redundancy for a period of up to 18 months from the date of birth of the child, or from the placement for adoption date.

Changes to employment contracts

Under the Employment Relations (Flexible Working) Act 2023 there will be changes in the way employees are able to make a flexible working request. These are expected to come into force in April 2024 although at the time of writing there is no set date. These changes will mean that employees should now be able to make two flexible working requests in a 12-month period, and employers must notify the requestor of their decision within two months. This will also become a day one right so new employees can make a flexible working request from the day their employment contract starts, currently employees only have a legal right to make a flexible working request after their first 26 weeks of employment. See more here.

Later in the year (currently expected for September 2024), under the Workers (Predictable Terms and Conditions) Act 2023, workers on temporary contracts of one year or less, or zero hours contracts will be given the right to request more predictable terms and conditions of work. No date has been formally announced for this update. See more here.

Finally, in October 2024 new responsibilities must be met by employers when it comes to their duty to prevent sexual harassment of employees. No formal date has been announced, however an amendment to the Worker Protection Act 2023 means that employers will have a proactive, legal duty to take reasonable steps to prevent the sexual harassment of their employees throughout their entire employment. See more here.

Employers need to communicate with their teams

Whilst most of these expected changes and updates might have little impact on employers from the outset, it’s still important that those in charge do everything they can to ensure they are operating their business lawfully. Employment laws are established to protect both employees and businesses and ensure that a safe and fruitful working environment can be enjoyed by all. It is key to communicate with your teams to not only ensure that they know about the legislation in place to protect them, but also to evidence the fact that as an employer you are conscientious in the way you operate, and that you have the best interests of your people at heart.

Other useful reads on the Insight Hub:

• How to employ someone for the first time
• What is IR35 and what does it mean for your business?