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What businesses should know about key legal changes in 2019

At a glance

  • A number of important legal developments have taken place this year
  • These include the introduction of executive pay gap reporting, and several changes in employment legislation, including enhanced rights for seasonal workers
  • We round up some of the key legal changes of 2019 that could affect businesses

A turbulent 2019 has seen parliament dominated by discussions about Brexit, with a lot less focus than usual on domestic policy. However, a number of important pieces of business-related domestic legislation have moved forward or come into force over the last 12 months.

There have also been significant judgements in UK courts that could impact the country’s businesses. Here, we round up some of the key legal developments of 2019, and look ahead to some changes on the horizon.

Executive pay gap reporting

Since 2017, UK companies with more than 250 employees have been required to report annually on their gender pay gap. In January 2019, the government announced that businesses of this size will also have to start reporting on their executive pay gap.

This means that from 2020, companies with more than 250 staff will have to publish the difference between their CEO’s pay and the pay of employees at the 25th, 50th and 75th percentiles on their pay scale.

But it may take a while for this new reporting to bed in. In the first year of gender pay gap reporting, more than 1,500 companies missed the deadline to publish their pay ratio, although that figure fell significantly the following year. 

Changes affecting workers on variable hours

In April 2019, new legislation came into force requiring all employers to provide payslips to all workers – not just employees. Payslips must also show the hours worked, where the pay varies depending on the amount of time worked.

From April 2020, new holiday pay rules will come into force for workers on variable hours and rates of pay (for example seasonal workers). Currently, holiday pay is calculated based on average weekly earnings in the 12 weeks leading up to a holiday. However, this reference period is now being extended to 52 weeks.

It’s hoped this will protect the rights of seasonal workers who might be paid more at busier times of the year, and whose holiday pay may therefore be lower depending on when they take their annual leave.

Enhanced rights for bereaved parents

Also in April 2020, the Parental Bereavement (Pay and Leave) Act will come into force, entitling primary carers – including parents, adopters, foster parents and guardians – to two weeks’ paid leave following the death of a child, which can be taken together or in two one-week blocks.

Tightened rules governing drones

More and more businesses are now using drones, for tasks ranging from security and surveillance to photography.

However, amid concerns about some of the ways drones are being used, from smuggling drugs into prisons to disrupting air travel, the government has issued a mandatory drone registration scheme, which came into effect in November.

The new rules require drone owners to complete an online test about legal and safe drone usage, and to pay an annual fee. Drones weighing above 250g will have to be registered and labelled with a unique licence number. The Civil Aviation Authority estimates the new registration requirements currently apply to about 130,000 drone users.

Legal clarity over facial recognition software

In September, the High Court became the first court anywhere in the world to rule on the legality of facial recognition technology.

The court was considering a judicial review brought by a Cardiff man who claimed his human rights had been breached by South Wales Police, who used automated facial recognition (AFR) to capture his image while he was out shopping.

Ruling in favour of the police force, the High Court said its actions had not amounted to a breach of data protection, privacy or equality laws, and that it had sufficient legal controls in place to control how images captured by AFR were stored and used.

The ruling is now subject to an appeal, and the outcome will be of interest to many businesses, for example those retailers who are using facial recognition software to identify shoplifters.

What does 2020 have in store for businesses?

Much depends on how Brexit unfolds, with businesses waiting anxiously to see what the future holds for issues ranging from the free movement of labour to trade tariffs.

Brokers and clients can be reassured that Zurich will continue to provide regular insight and analysis on the key issues affecting businesses in 2020.

Image © Getty

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