Legal Changes to Look Out for in 2023
With the new year coming up soon, it is time to keep an eye out for all the new legislation that is proposed for 2023.
One of the first and most talked about changes will be to the National Living Wage (NLW) as well as the National Minimum Wage (NMW). Chancellor Jeremy Hunt has confirmed that come April 2023 there will be an increase in the rates.
- The NLW will see a 9.7% increase, changing it from £9.50 to £10.42 per hour. This is highly beneficial for anyone over 23 as the NMW is at its topmost rate for 23-year-olds and above.
- The NMW for 21-22 years olds will see a slightly more increase at 10.9% changing the current rate of £9.18 to £10.18 per hour.
- For 16–20-year-olds, the increase is 9.7% and their current rates will change accordingly. 16–17-year-olds will now earn £5.28 per hour (the same goes for apprentice rates) and 18–20-year-olds will now earn £7.49 per hour.
However, it is important to keep in mind that the Real and London Living Wage also increased last year. The Real Living Wage saw an increase of 10.1% and is now at £10.90 per hour, while the London Living Wage increased by 90p making it £11.95 per hour. It’s only a matter of time before we can judge whether the new NMW and NLW are enough to combat the ever-growing cost of living in the UK.
Allowances and Pays
In terms of new rates, some more have been announced for Statutory Payments such as maternity/paternity pay, adoption pay, shared parental pay etc. All of these family-related payments will be capped at £172.48 per week.
Those eligible will receive anything below the capped amount or 90% of their average gross weekly earnings in all cases except Maternity pay. For Maternity Pay, employees working in companies where they earn less than £123 per week but have been working for at least 26 weeks will also be entitled. However, they will receive less than £156.66 per week.
Statutory Sick Pay will also see a new rate in 2023. From April 2023, the new Statutory Sick Pay rate will be £109.40 per week.
The Retained EU Law (Revocation and Reform) Bill
This bill essentially proposes the abolition of all EU-derived law unless the UK specifically retains it. It is proposed to come into effect in 2023, however, the exact date is still undecided. What this means is that the UK government will be unable to rely on any EU-made regulations including case laws.
Employers must keep an eye out for this as it can severely affect their organisation since regulations like TUPE and working time regulations are EU-derived. However, it is important to note that acts like The Equality Act 2010 will remain unaffected.
Rules Regarding Service Charges
2023 will also see the introduction of The Employment (Allocation of Tips) Bill. The bill states that businesses cannot retain tips, or any gratuity employees receive as it is rightfully theirs. It will ensure that tips are allocated equally and in a more transparent manner. To enable transparent distribution, employees will be able to ask for more information on their tips.
Carers leave was first proposed in 2020 but it is only now that it is being introduced. Based on what was proposed, the government plans on granting up to five days of unpaid leave to employees. Employees will be able to request days off for people who need “long-term care”, which does not include people with terminal illnesses.
As expected, eligibility is based on the relationship between the employee and the person who needs care. However, it is crucial to point out that the definition allows care for “dependents”, which includes girlfriends, boyfriends, siblings etc. The idea is to include anyone who may rely on the employee for care.
In terms of service and eligibility, there are no rules regarding which employee can opt for this, making this leave available for all. Carer’s leave will make it easy for employees as the leave can be taken as full or half days. Moreover, the request for leave cannot be rejected. Employers will have the option to postpone the leave if it’s better for the business.