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You may have noticed a number of recent press articles about employment status. It is being considered in the courts, the tax tribunal, by select committees in the House of Commons, the Taylor Review and of course by HMRC in its overhaul of IR35 in the public sector and it’s new employment status tool.
Trade Unions in particular are flexing their muscles, financing employment status claims including those against Uber, Deliveroo, Citysprint and Excel. The cases all seek to claim that the reality of the day to day work of the workers demonstrates little or no autonomy and that there is evidence of integration of the workers into the workforce.
A narrative is developing that the law is unnecessarily complex. For example, the difference between an employee and a worker is nuanced (although familiar to those supplying PAYE agency workers), there are different tests for employment status for employment and tax purposes and there is no clarity around what the “gig economy” is as it encompasses many different types of supply from highly paid, skilled contractors to zero hour take away delivery cyclists.
It seems however that there is growing support for greater legal recognition of “worker” status and to have some form of legal delineation between those lower paid workers who need access to state support such as sickness pay, holiday and pensions and those contractors who are willing to forego rights in order to retain their independence and distinct tax status.
We fully agree that the positon is unnecessarily complex in this area. The solution however is less easy. We will be monitoring these developments, and any changes that may arise as a result, closely.
New immigration skills charge
From 6 April 2017 the Immigration Skills Charge applies to employers that employ non EU migrants under Tier 2 General or Intra company categories. The charge aims to reduce Britain’s reliance on migrant workers and upskill British workers. Set at scale of £364 for small employers or charities, or £1,000 for employers with more than 50 employees or with an annual turnover in excess of £10.2 million. The charge has to be paid upfront to cover each year the applicant requires a visa for, so a large employer could face costs of £5,000 per applicant. It is designed to cut down on the number of businesses taking on migrant workers and incentivise training British staff to fill jobs.
These changes mean that it will become far more costly to sponsor migrants from outside of the European Union under Tier 2 of the points-based system.
The General Data Protection Regulations (GDPR)
As you are no doubt all aware, the GDPR will apply in the UK from May 2018 and replaces the Data Protection Act 1998 (DPA). The GDPR set a high standard for consent. They build on the DPA standard of consent in a number of areas and contain significantly more detail that codifies existing European guidance. It will apply not only to EU companies, but to any company processing the personal data of individuals in the EU in relation to offering goods or services, or to monitoring their behaviour.
The potential impact of the GDPR is high as they introduce significant penalties which can be imposed on employers that breach the GDPR, including fines of up to €20 million or 4% of annual worldwide turnover, whichever is greater. The level of fine will depend on the type of breach, but they are undoubtedly meant to penalise any companies which disregard the GDPR.
All companies will need to carry out a data audit in order to assess current HR data and related processing activities and identify any gaps with the GDPR. You should review your current privacy notices and update them if necessary to comply with the more detailed information requirements. Where consent is currently relied on, you will need to check whether or not it meets GDPR requirements and remember that consent may be revoked at any time. We also suggest you develop a data breach response plan to ensure prompt notification and allocate responsibility to investigate and contain a breach, and report. Lastly, you should train employees to recognise and address data breaches, and put appropriate policies and procedures in place.
- Amanda Mallender, Head of Legal
Please note that this legal update is provided by way of general information only. It does not constitute legal advice and you should seek advise from and rely on your own professional advisers where required.
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