Employment and immigration | UK Regulatory Outlook January 2024

Employment changes coming into effect in January and April 2024

At the end of last year, the government introduced a number of new laws which bring into effect a number of employment law changes relating to:

• working time;
• TUPE;
• flexible working;
• carer's leave;
• special protection on redundancy;
• neonatal leave;
• statutory right to request a more predictable working pattern; and
• a new duty to prevent sexual harassment.

Changes to working time and TUPE came into force on 1 January 2024 (although changes relating to holiday entitlement/pay for part-year and irregular-hour workers only relate to holiday years falling on or after 1 April 2024).  Changes related to flexible working, carer's leave and special protection on redundancy for those who are pregnant or who have taken a period of statutory family leave are set to come into force in April 2024.  A new duty to prevent sexual harassment is due to take effect in October 2024 and, while we do not yet have a date for when they will take effect, regulations have also been passed which permit workers to make a statutory request for a predictable working pattern subject to meeting certain requirements. The new statutory right to neo-natal leave is not expected to take effect until 2025.  

For more details on these and what actions you should be taking now, together with new statutory pay rates which will take effect during 2024, read our Insight.

Looking ahead

As we move into 2024, many employers will be keeping hybrid working arrangements under review; the end of 2023 has already seen some large businesses bring more clarity around their policies to ensure that expectations on attendance at a place of work are clear. We are likely to see employers continue to review and adapt working arrangements to address client and workforce demands, while keeping in mind their contractual and statutory obligations to each employee, and employee relations issues and the benefits of a diversified employee pool more generally.

The increasing role of artificial intelligence is also set to drive HR agendas during 2024. While for many businesses, we do not anticipate that it will replace current jobs in their entirety, it is becoming clear that generative AI tools are a potential replacement for some of the tasks that employees have routinely performed and employers will need to assist employees in re-focusing their duties and ensuring that they have the appropriate skill set to do so. Employers will need to be alive to the potential need for restructurings involving changes to terms and conditions and/or redundancies and the legal and practical issues these processes bring.

HR and employment counsel must also remain aware of the inherent risks within other AI tools that they may use directly or indirectly within their business: it is well recognised that AI tools may in fact produce discriminatory results or inaccuracies. It will be important to ensure that appropriate checks and balances are in place and practices reflect regulatory and other guidance on the use of AI in the workplace. International employers will also need to keep in mind the different legal frameworks governing AI across jurisdictions, with the EU and other countries taking different approaches to regulation.

Read more on the emerging trends we expect to see in 2024 here.

Update on regulating umbrella companies

As reported in an earlier Regulatory Outlook, last year a consultation ran on proposals to regulate so-called umbrella companies (the UK equivalent of Employers of Record, or EORs). In 2024 we expect the outcome of the consultation to be published which is likely to provide more clarity about what checks need to be carried out on umbrellas and whether end users will be liable for compliance breaches (including tax-related) by umbrellas they use. We anticipate that changes will not come in until 2025, but companies should review the consultation outcome once published and start thinking about what actions they may need to take to prepare for any changes. There is a chance that legislation will come in earlier than 2025, given anecdotal evidence of the growth in "dodgy" umbrella schemes in recent times.

IR35 enforcement under private sector regime

HMRC compliance enquiries and  enforcement activity is already increasing, and are likely to step up in 2024 as the four year time limit for claims (for tax year 21/22) approaches in April 2025. With fines and interest meaning that end users, staffing intermediaries and payment intermediaries may be liable for tax payments more or less equivalent to the amount they paid the contractors for the relevant work, companies should be ready to cooperate with any enquiries against them and be prepared to answer detailed labour supply chain questions by HMRC.

Immigration changes coming in 2024

Sponsored Workers

The UK government announced significant changes to salary requirements for sponsored workers in an attempt to reduce net migration. The proposed minimum salary will rise to £38,700.  While this may restrict who can apply as a skilled worker, it will especially affect industries with talent shortages in certain sectors such as hospitality and construction. In addition, the current salary "discount" for shortage roles will end, and a further review into suitability of the Shortage Occupation List is proposed. There is likely to be some transitional arrangements for existing skilled workers already in the UK. It is anticipated these changes will be brought in in the first quarter of 2024.

Graduate visa

The Home Office will commission the Migration Advisory Committee to consider policy options for reforming the graduate visa route so that it better supports a pathway into high quality jobs for graduates and to "prevent abuse".  Whether we will see further developments for this category or a closing of this category (which happened to its predecessor – Post Study Worker) is yet to be seen.

Students

New rules now mean specific requirements need to be met in order for students (and student dependants) to switch into the skilled worker route.  From 1 January 2024, changes to the UK student visa rules mean that international students will no longer be able to bring their dependant partner or children to the UK, unless they are enrolled in a PhD or postgraduate research programme.

Spouses of British or settled nationals

As part of the expected changes in 2024, the income requirement for British nationals will increase from the current £18,600 (no children) to £38,700. There will be an initial jump to £29,000 with the remaining increase being phased in over the next 12 months. The additional income requirement to sponsor children is yet to be clarified, as is the application of these new rules to extension applications.

ETA visa waiver programme

The Electronic Travel Authorisation (ETA) visa waiver programme for visitors from the EU and other countries whose nationals do not require a visa to visit the UK will continued to be phased out in 2024. Qatari nationals have been the first to use this system and while decisions appear to be made quickly there have still been reports of some refusals. It remains to be seen whether airlines and ground staff will receive the appropriate support from the Home Office in relation to checking ETA permissions of travellers before boarding and whether some travellers may be incorrectly denied permission to board.