Following the King’s speech on 17 July 2024, we now have a clearer idea of the Government’s priorities for 2024/25. Significant changes are expected, although details are still to be published. Given the potential impact, we advise employers to start preparing for the 2024/25 Government Policy Changes now to ensure their business is ready. Here are our 5 key steps to help you prepare for the year ahead.
1. Initial Assessment
To prepare for the 2024/25 Government Policy Changes, employers should first assess the forthcoming changes and their potential impact. Some changes may affect your business more significantly than others, so this process should be repeated as more information becomes available. Consider the following:
- Businesses that rely heavily on flexible employment arrangements must consider how more restrictive zero-hour contracts could impact them.
- If your pay is based on the national minimum wage, assess the potential cost impact of the removal of age bands.
- Understand the implications of changes to the NMW on recruitment and retention.
- If industrial relations are a challenge, prepare for the removal of the two-year qualifying service for unfair dismissal claims.
2. Financial Planning
Pay Rates
As you prepare for the 2024/25 Government Policy Changes, financial planning is crucial. If you only pay the national minimum wage, consider how upcoming changes will impact your business:
- Understand your workforce by analysing their age distribution to see how they fit within the current national minimum wage bandings.
- Conduct scenario planning. Even though the Low Pay Commission (LPC) hasn’t proposed new rates yet (usually around October), start forecasting now. Run scenarios with different hourly rates, including the current Real Living Wage (RLW), which reflects the cost of everyday needs and may influence the LPC’s new rates.
If you pay above the national minimum wage, assess how these changes might affect your reward strategy and the potential challenges in recruitment and retention.
Statutory Sick Pay (SSP)
Changes to how statutory sick pay is managed, and the amount awarded, will likely have a significant impact, especially on small employers:
- Review one or even two years of sick pay records to gauge future absences and use this data in forecasting future employment costs.
- Examine how rule changes could increase SSP eligibility within your workforce.
- Carry out scenario planning using different potential SSP rates to aid forecasting.
Parental Leave
The Government plans to review the current parental leave system within the first year. The plan is to make parental leave a day-one right, but it’s unclear if this includes paternity leave, which currently requires six months of service, or if it will be paid leave. These changes could significantly impact small businesses and their budgets:
- Conduct financial planning for the potential increase in paid leave.
- Given the lack of clarity, consider creating a contingency fund to manage unexpected costs associated with the new rules.
Training
Investing in training and development is vital to support the introduction of new employment legislation. Tailor training to the needs of your workforce, ensuring that line managers receive different training compared to other employees.
Training is also essential for building a defence against potential tribunal claims. As part of your financial planning, allocate a budget for the training and development of all employees.
3. Conduct a Comprehensive Audit
Auditing workplace policies and practices to ensure legal compliance with new employment legislation is fundamental as you prepare for the 2024/25 Government Policy Changes. A thorough audit will help you identify potential areas of non-compliance and guide necessary adjustments:
- Assess how your recruitment processes may be affected by changes to zero-hour contracts.
- Evaluate how changes to the NMW calculation will impact staff pay.
- Review how probation periods are managed across your business, as this may change.
4. Strategic People Planning
Strategic people planning is essential for ensuring business resilience and compliance in light of the 2024/25 Government Policy Changes. This process enables employers to align their workforce management practices with legal requirements, minimising the risk of tribunal claims and financial penalties:
- Anticipate and address potential impacts on recruitment, training, and employee relations.
- Integrate these changes into your broader strategic framework to maintain operational continuity, optimise resource allocation, and preserve employee morale.
5. Engage with Your Workforce
Engaging with your workforce and any recognised trade unions during the forthcoming employment law changes is crucial. Open communication is key to preparing for the 2024/25 Government Policy Changes:
- Keep employees informed about how new entitlements will affect their roles, benefits, and rights.
- Encourage employees to voice concerns and offer feedback, which can be invaluable in fine-tuning your implementation strategies.
- Involve employees in the process to build trust, improve morale, and facilitate a smoother transition.
Useful Resources
As you prepare for the 2024/25 Government Policy Changes, take advantage of our free resources designed to help your business navigate these changes effectively:
- Free People Plan for 2024: Download our comprehensive guide to align your workforce strategy with the latest legal requirements and ensure your business is ready for the year ahead.
- HR Risk Audit: Conduct a free HR Risk Audit to identify potential areas of non-compliance and address them proactively.
- Employment Law Newsletter: Subscribe to our newsletter to receive the latest updates on employment law directly to your inbox.
We’re here to help
If you need help navigating the 2024/25 Government Policy Changes, HR Solutions is here to assist. Our expert team can provide the guidance and support you need to ensure your business remains compliant and resilient.
For personalised support, please contact us and speak to a member of the team.
