Last July, Matthew Taylor published an independent review (The Taylor Review) into modern working practices, with a particular focus on the rights and responsibilities of employees, along with the freedoms and obligations of employers, in the ‘gig economy’ sector. At the time, Alan Price from Peninsula wrote about what it could mean for small businesses, and last week the government delivered its official response. Steve Woods, UK spokesperson for the workforce management software company, Deputy, shares what companies need to do to prepare.
The government’s response to the Taylor Review is very welcome and somewhat surprising, going much further than anyone expected and offering an overhaul of workers’ rights that should go a long way to addressing the concerns of millions of vulnerable workers. The labour market reforms announced by the government this week will ensure:
- Stricter enforcement of holiday pay and sick pay for all workers.
- A list of day-one rights, including holiday and sick pay entitlements, and a new right to a payslip for all workers, including casual and zero-hour workers.
- All workers are able to request a more stable contract, providing more financial security for those on flexible contracts.
- The low pay commission considers a higher minimum wage for people on zero-hour contracts.
- There is consideration given to repealing laws allowing agencies to employ workers on cheaper rates.
- Bigger fines for companies that are repeat offenders at using people in bogus self-employment.
While this is great news for employees, the reforms are only the beginning of what will prove to be a turbulent path for businesses employing a varied workforce, regardless of size. Changing contracts will spell complexity and cost if not managed smoothly. There are many businesses that have embraced new tools for managing their workforce and delivering more transparency, but there are still thousands that will find themselves in danger of large fines and illegal working practices if they don’t adapt to better support their employees.
The new plans will require increased investment from firms in tracking critical HR functions such as holiday entitlements and sick pay. The government was light on how the plans will be enforced, but it did highlight that certain employment tribunal fines will be quadrupled to £20,000.
Businesses need to invest in their capabilities to track and manage entitlements for workers. With the big presence of tech firms in the sector, we’re expecting to see some creative approaches in this area. It is the employees who help make companies so successful, so it is only right that they get reassurance and protection in the workplace. This means visibility into who is paying them, what they can expect to earn, and when and where they are working.
Small businesses are often affected more by changes that add administrative tasks, checks and balances that need to be met. With the reforms coming to labour laws in the UK, businesses will likely need to think about using tools like ours to ensure they comply.
Overall, the government’s response to the Taylor Report is a really positive one, for both employers and employees. However, as Frances O’Grady, the secretary general of the TUC, says, ‘These plans won’t stop the hire-and-fire culture of zero-hours contracts or sham self-employment. And they will still leave 1.8 million workers excluded from key protections.’
There is still a moral responsibility on companies to do the right thing when it comes to ensuring that people who work for them are protected, and are given basic employment information.
Here are the five steps companies should be thinking about now; to be ahead of the reforms:
1. Understand the new plans
Spend some time researching the government’s new plans and what it will mean for your business
2. Notify your staff
Communicate how you’ll address the new plans to your staff and the changes you may be making
3. Get the right tracking in place
Start thinking about the systems you need to put in place to effectively track and report on your employee’s pay rates and entitlements
4. Allocate resources
Ensure you have the resources to manage rolling out the relevant HR changes required
5. Move fast
Potential new hires will be aware of their new rights and will expect businesses in the sector to be seriously and pro-actively implementing the new reforms in the coming weeks.
Steve Woods is UK spokesperson for Deputy.