Head spinning with legal updates? Don’t have time to read them all? Emma James summarises the hot topics and ‘at a glance’ news for recruitment businesses. 

According to Emma, the headline points you need to know about are:

1.    Temporary National Insurance Increase and recruitment sector activity

As you may have seen, there will be a temporary increase of 1.25% to National Insurance from 6 April 2022. Whilst this will drop again in April 2023 and be replaced by a new health and social care levy at that time, recruitment businesses still have to deal with the financial and administrative impact of the change in the meantime.

The Recruiter recently did an article on how this could impact on recruitment businesses and also reported on the Recruitment and Employment Confederation’s recent letter to government outlining concerns for recruitment businesses.  For a read of those articles, click follow the links below:

Recruiters Should Consider ‘Operational Changes’ to Cope With NI Increases

REC Highlights Concerns in Letter to Government Ahead of Spring Budget

2.    Other Rate Increases from 6 April

From 6 April 2022, the national living wage will increase from £8.91 per hour to £9.50 per hour. Other minimum hourly rates will also increase from then and have been summarised in a handy table here.

When calculating statutory redundancy payments, the cap applied to a “week’s pay” by employers will increase to £571 (instead of the current limit of £544). This is also the rate used for basic awards in tribunal claims. 

3.   Holiday pay and the Pimlico Plumbers case – what’s all the fuss about?

The case of Smith v Pimlico Plumbers (recently decided by the Court of Appeal) has cast doubt on previous caselaw in relation to how to pay holiday pay on termination and the steps that must be taken by businesses when dealing with certain workers.

During his engagement, Mr Smith was classed as self-employed and denied certain worker rights, including paid holiday pay. Mr Smith later brought claims and sought compensation for unpaid annual leave that he’d taken during his engagement. The Court of Appeal ruled that Mr Smith was entitled to recover compensation for all unpaid leave taken throughout his six-year engagement.

As you may know, the government previously brought in legislation to put in place a 2 year backstop because of concerns over the impact of long-stretching holiday pay claims going back over several years and the cost of this for employers. This decision calls into question the lawfulness of the backstop and has other implications. For recruitment businesses, the case is particularly important because of the difficulties in accurately categorising the status of those involved in temporary work (workers v self-employed) and because if additional holiday pay is owed to workers (spanning several years) then they may not be able to recover those sums from their clients.

More details about the case can also be found in our blog.

4. SSP and other changes linked to the Government’s Living with COVID-19 Plan -

Provisions on statutory sick pay (SSP) reverted to their pre-pandemic position from 24 March 2022, which means that workers will no longer have the right to claim payment of SSP from the first day of Covid-related absence. The government recently outlined this and other changes as part of its plan for removing certain legal restrictions and ‘living with COVID-19’. For more discussion of recent changes and managing Covid-19 in the workplace, read our blog.

If you would like any further support or advice relating to the matters discussed in this blog, get in touch with Emma by emailing emma.james@jmw.co.uk or calling 0161 507 1021.

Emma James is a Senior Associate in the employment team at JMW Solicitors LLP. Whilst Emma has picked out certain topics of interest, please note that other changes may be taking place and this blog is not intended to provide an exhaustive list.