Important employment related updates

Jersey businesses had a challenging year in 2021, and the start of this year saw a small but important flurry of employment law changes.

Among the changes was the introduction of the first local legislation requiring employers to provide a minimum 20-minute break for those working six hours or longer. In addition, the exclusivity clauses in zero-hour contracts are now unenforceable. Finally, an additional week of statutory minimum holiday entitlement brings it up to three weeks per annum.

Recent announcements confirmed that the week’s pay cap for redundancy pay in Jersey would increase to £860 per week and that the Jersey minimum wage will increase to £10.50 per hour from 1 November 2022.

This about-turn from the Minister for Social Security comes after announcing in early September that the minimum wage would increase to £10 per hour on 1 October. This change may cause problems for some businesses, as employers may have already confirmed an increase on 1 October for affected employees.

If this is the case in your business, you’ll need to look at your contracts of employment to check if they have any clauses around minimum wage increases or whether a salary increase is a contractual term. This type of clause is unlikely but may the case, so it’s better to err on the side of caution. However, if you find that your contracts do hold a similar clause, you may need to consult with the affected employees if you are to withdraw the increase from 1 October and apply it from the November date instead.

Throughout 2022, Jersey and Guernsey’s businesses have shifted focus to achieving a living wage. In turn, companies have been deciding what to do regarding the cost of living pay rises following recent global developments and further exacerbated by the local recruitment crisis.

From our viewpoint, we’ve seen some employers choosing to give smaller mid-year salary increases, while others have sought to pay a one-off bonus to assist with immediate financial concerns. In the meantime, other business owners are waiting until January to make any decisions.

Additionally, there will be a temporary 2 per cent reduction in Social Security contributions due to the ‘mini budget’ to help address the cost of living crisis. This change was very recently announced by the Government of Jersey and will take effect between October and December 2022. For our payroll clients, this change will automatically be applied to our payroll software.

In the UK, Parliament received several new employment law bills to consider. Draft regulations emerged banning contractual exclusivity clauses for those paid at or below the lower earnings limit, which is currently £123 per week. Two private member bills on neonatal leave and handling tips at work were also proposed.

Like the recent changes in Jersey, the exclusivity ban adds low-pay workers to provisions permitting zero-hours workers to work for more than one employer. We can expect this change to come into force later in 2022.

For parents of babies needing hospital care in their first weeks, the Neonatal Care (Leave and Pay) Bill provides an additional 12 weeks of paid leave on top of their statutory parental leave and pay.

The Employment (Allocation of Tips) Bill makes it unlawful for employers to withhold tips from staff. It also enables employees to request information on employers’ tipping records and paves the way for a new statutory Code of Practice on how businesses should distribute tips.

Since the passing of the Queen, 19 September has been confirmed as a public holiday to allow businesses and individuals to pay their respects and commemorate the final day of the national period of mourning. However, this holiday raises several questions from employers about opening hours and days off.

If businesses choose to remain open, employers will need to consider how they treat staff pay. This is particularly true for those on rolled-up holiday pay in Jersey and Guernsey, as the additional day might not have been a consideration in the rolled holiday proportion of their pay.

No decision has been made yet on whether there will be a public holiday for the Coronation, so it’s worth keeping an eye on that situation.

Do any of these updates affect your business? If you have any questions or are looking for more advice on how to include these updates in your organisation, our HR experts are here to help.

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