Employment Law Update

CHANGES TO UK RIGHT TO WORK CHECKS

By Euan Smith

Navigator Employment Law

As from 1 October 2022, changes were made around right to work checks meaning that temporary (covid related) adjustments have been disapplied. As such, businesses can no longer have employees share a scanned copy document, or photo, and then confirm worker identity over a video call.

Arecent survey suggested that more than half of the businesses contacted were not ready for the recent changes. While this has been, on one analysis, a reversion back to what was in place previously, there are one or two other important changes (including technological) for businesses to consider.

These being that employers can now use one of three methods to check an individual’s right to work. Namely (i) an on-line check (ii) a traditional manual check or (iii) using an Identity Service Provider (IDSP). Crucially, which one is used will depend on the immigration status of the relevant individual/applicant (see table).

Immigration Status

Biometric residence permit, biometric residence card and frontier worker permit holders

Those with e-visas e.g; EU settled status, EU pre-settled status, or those who have applied for UK immigration permission using the UK immigration: ID check app

Those not eligible for on-line checks e.g; valid UK and Ireland passport holders

Checking Method

Online

Online

Manual or with an IDSP

In terms of online checks, these will need to be done using the Home Office’s right to work check service and those looking to go down the digital verification route, instead of manual checks (for UK/Ireland passport holders), must use an IDSP to verify the right to work.

Needless to say, it is more important than ever to get your right to work checks correct (given these recent changes). This mainly because employing an illegal worker can still result in; civil penalties of up to £20,000 per illegal worker, the loss of the right to sponsor work visa applications (for foreign nationals) and criminal convictions (in cases of serious breaches).

However, as was the case previously, if your business performs the relevant checks correctly then it should avail itself of the statutory defence (to civil liability), if it later turns out any worker did not have the right to live and work in the UK.

While every business is different, and well resourced businesses/HR departments will likely have put their mind to compliance already, questions to consider might be; • The percentage/number of employees, or prospective employees, who hold various immigration documents (to help decide whether it is worth the business using an IDSP).

• Determine (or re-determine) how your business/HR department will conduct manual checks, as from 1 October.

• Create guides (based closely on the relevant guidance) for those conducting right to work checks, to ensure staff understand what methods to use and what is involved with each one.

Retained EU Law Bill

While the political environment remains somewhat febrile, certain recent developments/ announcements (made shortly prior to Jeremy Hunt’s appointment, as Chancellor) don’t appear to have come under immediate scrutiny! The existence now of a Retained EU Law Bill, albeit not law yet (as still to be debated before parliament), effectively mandates that employment laws derived from the EU will soon likely be subject to change or removal. The construction of the Bill means that any EU laws not to be formally retained will automatically expire, on 31 December 2023 (albeit this date could be deferred until 2026). This being a change from the previous position of continuity, in terms of such EU laws.

While much may yet stay the same, either through specified retention or the Bill not (ultimately) becoming law, this doesn’t seems the intention of the cabinet/ government. It’s also clear that we are talking about an extensive range of law, to include; working time regulations, transfer of undertakings (protection of employment), and part time/fixed term/agency worker regulations. At this stage, we therefore simply don’t know whether or not such EU law will largely be retained, and so HR professionals (and other working in this field) will need to monitor developments closely.

IR-35 Reforms?

Another announcement made, in and around the recent “minibudget”, was that prior reforms to off-payroll working restrictions (“IR-35”) were to be phased out from April 2023.

This would have meant that, as from 6 April 2023, contractors-working for a business through an intermediary-would be responsible for verifying their own employment status and paying the necessary tax and national insurance contributions accordingly.

As such, end user businesses would no longer be potentially liable for any unpaid PAYE or NICS, relative to any incorrect job status assessment (by the contractor/their intermediary).

However, in an illustration of just how febrile the recent political environment has been, this announcement was promptly reversed by Jeremy Hunt (even though it did not appear to have had too many detractors). The Chancellor though, likely being concerned about the admitted loss of revenues any change would have brought.

At this stage, therefore, IR-35 (as it currently stands) looks likely to remain!

In-Work In-Work Poverty Poverty

THE PURSUIT OF Happiness Happiness

What steps can employers and HR practitioners take to address the current cost of living crisis on employees? Faced with escalating living costs, in-work poverty is hitting the pockets of more workforces than ever across Scotland. Andy Moore finds out how HR can help…

The 2006 film, The Pursuit of Happyness, portrays a struggling salesman, played by Will Smith, who’s lost his home and bouncing from one homeless refuge to another, trying to make ends meet while bringing up his young son, Smith’s own son Jaden, in real life. It’s a story of the struggle of an impoverished father who has to work excessively long hours to survive in a tough financial situation.

Fast-forward 16 years, and the current cost of living crisis is impacting more working people than ever under a punitive state of in-work poverty. The Poverty and Inequality Commission reveals that 61% of Scottish working age adults are in poverty, and 68% of children in poverty live in a household where someone is in employment.

Katie Schmuecker, Principal Policy Adviser at Joseph Rowntree Foundation, says:

“Our research illustrates the frightening year of financial fear low-income families are living through. Families up and down the country face options that are simple but grim. They fall behind on bills, go without essentials like enough food, or take on expensive debt at high interest. In some cases they have to do all three.”

So what can HR do to help address the burden of in-work poverty? While most employers are already bearing the brunt of higher operating costs, practitioners can consider a range of options. These include fostering a culture of empathy, open communication, financial wellbeing support, supporting in-work progress and paying a fair and liveable wage.

According to The Poverty Alliance, there are over 57,000 people working for over 2,800 real Living Wage employers throughout Scotland, as the new UK-wide Living Wage rate rises from £9.90 to £10.90.

“Ensuring staff are paid at least the real Living Wage is the single most important thing employers can do to support their people with rising living costs,” believes Gail Irvine, Living Wage Scotland Manager. “Despite the economic challenges, more employers are paying a wage that covers everyday needs. This is a necessary and vital investment in their workforce. Businesses who pay the real Living Wage reap the benefits in terms of better recruitment and retention, less sickness absence and a more motivated workforce.” HR can play a crucial role in helping working people to survive poverty in several other ways. But financial wellbeing depends on more than how much people are paid. For many, it’s about feeling secure and in control, knowing they can pay the bills today, deal with the unexpected, and being on track towards a healthy financial future.

By offering employee benefits that help incomes go further, sign-posting financial advice and guidance, plus creating a safe place to talk about money worries, employers can make a big difference to people’s lives.

For an employee living in poverty, a route to progress out of a low-paying job can offer a sense of empowerment. Whether it’s developing skills, providing pathways free of barriers or challenging perceptions, HR can perform a pivotal part in helping employees progress in the workplace.

Further steps may include providing subsidies for utilities, travel, childcare or food and leisure if possible. Employee Assistance Programmes (EAPs) can give employees the ability to increase their income with access to instant discounts at retailers. Providing employees with sick pay or crisis loans can help to protect them and give them the time off without risk to their livelihood / a rise in absenteeism.

The Institute of Public Policy and Research found the chances of being pulled into poverty have doubled for households, even with two people in full-time work.

Meanwhile, the Joseph Rowntree Foundation discovered that while work can and should help people escape poverty and it often does not. Its UK Poverty 2022 report found that work is becoming less effective at warding off poverty.

In-work poverty isn’t limited to those in the lowest-paid roles; the risks of being trapped in poverty are not equal. Factors depend on the sector people work in, their hourly pay and number of hours worked, where they live, and their age, gender, ethnicity and disability. Barriers like access to childcare and transport can also determine whether people are able to escape poverty through work. Those most vulnerable include children, people in families without full-time workers, singleparent families, those with a disabled person, families with three or more children and those in rented accommodation. Louise Woodruff, Policy and Research Manager at the Foundation, sums up:

“Work is a huge part of our lives, and employers have the power to make the difference between staff being on the edge financially and offering them a firm foundation to build a better life for themselves and their families. Where employers can help their staff through the current pressures on their cost of living, they are likely to reap the benefits in terms of loyalty, retention and a healthier, more content workforce.”

HR must be in pursuit of tackling in-work poverty.

Putting a lid on in-work poverty

• Sign-posting financial advice and guidance • Create a safe place to talk about money worries • A route to progress from low-paying jobs can offer a sense of empowerment • Develop skills, provide pathways free of barriers or challenge perceptions • Offer subsidies for utilities, travel, childcare or food and leisure • Employee Assistance Programmes (EAPs) • Give employees the ability to increase their income with access to discounts at retailers • Provide employees with sick pay or crisis loans