6 key Legislation changes that impact Employers in 2023

A series of important legal changes will come into effect this year. Flex provides a user-friendly guide to help you stay compliant....

Indeed Flex

4 May 2023

4 min read

A series of important legal changes will come into effect this year. Flex provides a user-friendly guide to help you stay compliant.

Minimum wage increases

From April 1st, we saw the National Minimum Wage (NMW) and accommodation of offset rates increase to the following: 23 and over – £10.42 21 to 22 – £10.18 18 to 20 – £7.49 Under 18 – £5.28 Apprentice – £5.28

Why the change?

The increase is based on recommendations from the Low Pay Commission’s (LPC) 2022 report. The report was based on surveys from 56 organisations employing nearly 1 million workers, as well as 16 detailed case studies on the influence of the NLW.

What it means for you

Many employers who were previously confident that their staff are paid comfortably above the legal minimum may find they are now in danger of breaching the law. They will need to pay close attention to the new statutory minimums; it may also be necessary to review contracts and arrangements with lower-paid staff to ensure their agreements are compliant with the new NLW framework. 

Unfair dismissal/redundancy pay increases

From April 6th, the limit on a statutory week’s pay increased to £632. As a result, the payment cap for unfair dismissals increased:

  New Statutory Week’s Pay Rate New Unfair Dismissal Basic Award New Cap for Unfair Dismissal
England and Wales £643 £19,290 £105,707
Northern Ireland £699 £20,070 £105,915

What it means for you

With the lingering threat of a recession, many businesses are looking to restructure their workforce and save on labour. But these companies will have to ensure any payouts meet the new statutory limits and minimums. In England and Wales, the cap on compensatory awards for unfair dismissal increased by nearly £12,000; in Northern Ireland, it increased by more than £11,000.

Family Friendly Leave

A series of statutory family payments increased by 10.1% on April 2nd. These included:

  • Statutory maternity pay
  • Statutory adoption pay
  • Statutory paternity pay
  • Statutory shared parental pay
  • Statutory parental bereavement leave

What it means for you

The rates of each of these categories increased from £156.66 to £172.48 per week. While this is a relatively small increase, many organisations will need to update their systems to account for them and stay compliant.

Statutory flexible working changes

Historically, employees needed to work 26 weeks before they could make a statutory flexible working request – and they could only do so once a year. But in 2023, the government is expected to take forward measures that make flexible working an employee’s right from their first day on the job. 

Why the change?

A shift in approach like this has been in the works since 2019, and the ‘Making Flexible Working The Default’ consultation made such a move inevitable.

What it means for you

The right to flexible working will force employers to embrace the new paradigm of flexibility. Once the bill becomes law, employers will be required to consult with employees when they intend to reject the request and allow two requests per year. This will force organisations to have a strong justification for denying flexible working arrangements. 

Carer’s leave bill

2023 will likely see the Carer’s Leave Bill become law, giving employees with long-term caring responsibilities of a dependant the right to up to five working days of unpaid leave – from their first day in employment. 

Why the change?

The bill reflects a growing awareness of carer’s working burden, likely driven by the pandemic. 

What it means for you

While the employee must give notice twice the length of the leave, the leave can be taken as partial or full days – and can be taken flexibly to suit the employee’s caring needs. Employees will also be protected from dismissal or detriment due to taking their leave; if they are fired for this leave, it automatically counts as unfair dismissal. 

Employees keep their tips

Employers are currently allowed to take a percentage of tips earned by staff. But the Employment (Allocation of Tips) Bill will make this unlawful, ensuring employees keep 100% of their tips. 

Why the change

Workers in hospitality are generally low paid, and have complained for a long time that they don’t get to keep their tips. 

What it means for you

Once the bill becomes law, employers will have to record tips and show how they are allocated. These records must be available to workers at all times, and could be scrutinised to ensure compliance.