United Kingdom HR Information

Updated on: 2025/03/11 04:48 (UTC)

Overview

The Employment Rights Act 1996 contains the primary statutory rights of employees. Other key laws affecting employment include the Equal Pay Act 1970 and the Equality Act 2010.

Hiring

Employment Contracts

An employment contract becomes enforceable as soon as the person agrees to an unconditional job offer. The terms of employment (i.e. the employees’ rights, responsibilities and duties,) can come from different sources, such as:

• verbally agreed;
• in a written contract;
• in an employee handbook;
• in an offer letter;
• required by law;
• in collective agreements; or
• implied terms.

Implied terms. Certain terms are implied in contracts of employment under British law. Implied duties of an employee include:

• fidelity (serving the employer faithfully and not acting against its interests),
• obedience,
• due diligence and care and
• preserving trade secrets and confidential information.

Terms commonly implied with regard to the employer include the duty to maintain a relationship of trust and confidence with the employee. The employer is obliged to treat its employees fairly, to act responsibly and in good faith towards them, and to care for their health and safety.

Terms in writing. Employment contracts do not have to be in writing. However, employers must provide a written document (known as the ‘principal statement’) to employees who will be working for the employer for more than one month on their first day of work.

The principal statement must include the following information:

• names of employer and employee;
• date when employment began;
• the employee’s job title or description of work;
• where an employee or worker will be working and whether they might have to relocate;
• vacation entitlement;
• how long a job is expected to last;
• notice periods;
• details of eligibility for sick leave and pay;
• details of other types of paid leave, such as maternity leave and paternity leave;
• the duration and conditions of any probationary period;
• how much and how often the employee will get paid;
• the normal working hours and whether such hours may be variable; and
• any obligatory training.

Employers must notify employees about any changes to the principal statement within one month of making the change.

Employers must give employees a wider written statement within two months of the start of employment. This document must include information about:

• pensions and pension schemes;
• collective agreements;
• any other right to non-compulsory training provided by the employer; and
• disciplinary and grievance procedures.

Although employers and employees are generally free to agree to the terms on which employment is offered, British law imposes a number of obligations, rights, and protections that may override the terms of the contract. These may apply even if the parties have agreed that the laws of an alternative country should govern the contract of employment.

No change to an employee’s contract may be made without his or her consent.

Probation periods are not mandatory. Employees who are in their probationary period have the same rights as all other employees.

The U.K. has a 3-tiered employment status framework made up of employees, workers, and self-employed individuals. On July 26, 2022, the government issued guidance on individuals’ employment rights.

Restrictions on Hiring

Children under the age of 16 are not allowed to work in a full-time job, but they are permitted to work a limited number of hours from the age of 13. Employees who are aged 18 or above are afforded the same rights as adults.

Recordkeeping

Employers are required to maintain records of:

• individual hours worked;
• holidays;
• pay;
• paid sickness (more than four days) and statutory sick pay;
• accidents, injuries, diseases and dangerous occurrences; and
• tax and national insurance.

Records of expenses and benefits provided to employees must be kept for three years.

Background Checks

Right to Work Checks. Under the Asylum and Immigration Act 1996 and the Immigration, Asylum and Nationality Act 2006 employers must ensure that new employees are allowed to work in the U.K. Businesses can be fined up to 20,000 pounds per illegal worker if they cannot show evidence that they checked an employee’s right to work.

On April 6, 2022, the government issued regulations that introduced a new digital technology that employers can use as an alternative for conducting RTW checks of non-migrants. The new technology, called the Identification Document Validation Technology (IDVT), is operated by certified Identity Service Providers (IDSP) who act on behalf of the employer to conduct RTW checks. Until Sept. 30, 2022, employers also have the option to conduct virtual or in-person inspections of documents from non-migrants (British and Irish nationals). From Oct. 1, 2022, the option to conduct virtual RTW checks of non-migrants will be removed and employers will need to use either a certified IDSP check or a manual in-person check of identity.

The new regulations also specify that employers may no longer accept physical (non-digital) versions of Biometric Residence Permits, Biometric Residence Cards, or Frontier Worker Permits as evidence of right to work. Instead, employers must use the Home Office online checking service to conduct RTW checks for individuals holding these cards or permits.

Employers can ask applicants about past criminal convictions if relevant to the job but when doing so need to be mindful of employees’ right to withhold information in certain instances. For example, an ex-offender may withhold details of criminal convictions when applying for a job, depending on the job, the offense, and the time since conviction. Old and minor criminal convictions do not have to be disclosed by applicants after a certain period of time has lapsed.

Employers may only ask successful candidates for a health check before hiring them if it’s a legal requirement or the job requires it. Information may be requested about any disability that might affect someone’s application, such as any reasonable adjustments that the organization might need to make to assist in the application process or in the job itself.

Noncompetition Agreements

As the duty of fidelity no longer applies to an employee after termination of employment, employers may seek to impose express post-contractual restrictive covenants. Restrictive covenants are valid only if they protect the employer’s legitimate business interests, such as preventing employees from joining a competitor for a certain period of time. If the length and scope of the restrictions are not reasonable, the covenant may be declared unenforceable by a tribunal or court, in which case the employee will be free to accept any offer of employment. As a general rule, the more narrowly a restrictive covenant is drafted, the more likely it is to be enforceable. British courts are unlikely to uphold a restriction of more than six months after termination.

Trade secret law in the U.K. protects company information that:

• is not generally known,
• has economic value, and
• has been the subject of adequate efforts by the company to keep the information secret.

Anyone found to have unlawfully acquired, used, or disclosed a trade secret may be held civilly liable.

Reference Citations

Employment Contracts: Employment Rights Act 1996, §§1, 138; Employment contracts

Restrictions on Hiring: Children and Young Persons Act 1933, §§ 23, 24

Recordkeeping: National Minimum Wage Regulations 2015, § 59; Working Time Regulations 1998, No. 1833, § 9

Background Checks: The Police Act 1964, ch. 48; Asylum and Immigration Act 1996, ch. 49; Immigration, Asylum and Nationality Act 2006, ch. 13

Noncompetition Agreements: The Trade Secrets Regulations, 2018

Immigration and Work Permits

In General

The U.K. has implemented a points-based immigration system that treats EU and non-EU citizens equally. Any foreign national from outside the U.K., excluding Irish citizens, must apply for permission in advance.

Under the points-based system, foreign nationals must meet a specific set of requirements for which they will score points. Those who gain enough points will receive a visa.

Employers must have a sponsor licence to hire most workers from outside the U.K.

Visas and Work Permits

Skilled Worker Visa.Under the skilled worker system, foreign nationals coming to the U.K. for work must be able to demonstrate that:

• they have a job offer from a licensed sponsor;
• the job offer is at the required skill level;
• they speak English to the required standard; and
• they have a job offer that meets the minimum salary threshold.

Applicants may trade characteristics, such as their qualifications, against a lower salary to get the required number of points. There are exceptions to the minimum salary requirement if the applicant has:

• a job offer in a specific shortage occupation;
• a PhD relevant to the job; or
• a PhD in a STEM subject relevant to the job.

There is a fast-track entry system for doctors, nurses and other healthcare professionals.

Global Talent Visa. Individuals can apply for a Global Talent visa to work in the U.K. if they a leader or potential leader in one of the following fields:

• academia or research;
• arts and culture; and
• digital technology.

Employers do not need to be a licensed visa sponsor to employ a foreign national under the global talent scheme.

The Global Talent Visa is valid for five years and can be renewed.

Global Business Mobility Routes. In 2022, the U.K. rolled out new visa categories for foreign businesses seeking to transfer workers to the U.K. on a temporary basis. The Global Business Mobility route includes the following subcategories:

The Senior or Specialist Worker category is a long-term visa intended for senior managers or specialist employees who are being assigned to do an eligible job at their employer’s U.K. branch. The visa is valid for five years and can be extended. To be eligible, applicants must:

• be an existing employee of an organization that’s been approved by the Home Office as a sponsor;
• have a ‘certificate of sponsorship’ from their employer with information about the work they will do in the U.K.;
• do a job that’s on the list of eligible occupations; and
• be paid the minimum eligible salary required for their job.

The U.K. Expansion Worker category is a short-term visa intended for senior managers or specialist employees who are being assigned to the U.K. to open a branch of an overseas business. The visa is valid for 12 months and can be extended for up to two years in total. To be eligible, applicants must:

• have a valid certificate of sponsorship from their employer;
• have worked for their employer outside the U.K.;
• do a job that’s on the list of eligible occupations; and
• be paid the minimum eligible salary required for their job.

From May 30, 2022, top international graduates may apply for the High Potential Individual visa. Candidates must have either a bachelor’s or postgraduate degree from a non-U.K. top 50 global overseas university. This visa allows individuals to stay in the U.K. for up to 2 years if they have a bachelor or master’s degree, or up to 3 years with a PhD.

The new Scale-Up Visa, which takes effect on Aug. 22, 2022, is aimed at highly-skilled individuals who can support the growth of U.K. scale-up businesses. Employers seeking to sponsor workers under this category must have achieved a 20 percent rise in revenue or staffing per annum during the three years prior to the application, and had a minimum of 10 employees at the start of this three-year period. The visa is valid for an initial two-year period and can be extended an additional three years subject to the employee meeting a specified earnings threshold.

Penalties

Employers found to have employed someone they knew or had ‘reasonable cause to believe” did not have the right to work in the U.K. can be subject to five years’ imprisonment and/or an unlimited fine. Businesses can be fined up to 20,000 pounds per illegal worker if they cannot show evidence that they checked an employee’s right to work.

Reference Citations

Visas and Work Permits: An Introduction for Employers

Penalties: Penalties for Employing Illegal Workers

Nondiscrimination

In General

Employers may not discriminate against employees or prospective employees on the basis of race, sex, pregnancy or maternity, gender reassignment, marriage or civil partnership, disability, sexual orientation, religion or belief or age.

Types of Discrimination

British employers must not unlawfully discriminate against employees at any stage of the employment cycle, including advertising positions, short-listing candidates, interviewing and making offers. Under the Equality Act 2010, it is unlawful for an employer to discriminate against employees or applicants for employment on the basis of:

• race (which includes color, nationality, and ethnic or national origin),
• sex,
• pregnancy or maternity,
• gender reassignment,
• marriage or civil partnership,
• sexual orientation, or
• religion.

Except in limited situations, employers cannot treat a person less favorably than others because of any of the protected characteristics listed above. To do so is considered direct discrimination. Direct discrimination also includes discrimination based on the association of a person with people who have a protected characteristic or on the incorrect perception that a person is a member of a protected group. Except in cases of pregnancy or maternity discrimination, direct discrimination requires victims to identify real or hypothetical comparators to assess whether they have been treated less favorably.

Employers also may not engage in indirect discrimination, which entails applying an apparently neutral requirement or condition that in practice is more difficult for people with protected characteristics to meet. An employer may overcome a potential indirect discrimination claim if it is able to show that the requirement, condition, or practice is a proportionate means of achieving a legitimate aim.

An example of indirect discrimination on the basis of sex would be the exclusion of part-time workers from occupational pension schemes, which, because part-time workers are more likely to be women than men, would have a disproportionate impact on women.

Harassment is a form of discrimination involving unwanted conduct (including conduct of a sexual nature, related to gender reassignment, or demanding sexual favors) that has the purpose or effect of violating a person’s dignity or creating an offensive, intimidating, or hostile environment. Harassment is unlawful if it is related to any protected characteristic.

Victimization is discrimination against a person because that person has complained (or intends to complain) about discrimination or has given evidence in relation to another person’s complaint. An employee must not be disciplined, dismissed, or suffer reprisals for complaining about discrimination or harassment at work.

There is no limit on compensatory awards for discrimination, and an employer will be held liable for acts of discrimination or harassment committed by its employees in the course of employment, whether or not done with the employer’s knowledge and consent, unless the employer can show it took reasonable steps to prevent the conduct.

Sexual Harassment. The Worker Protection (Amendment of Equality Act 2010) Act 2023, effective Oct. 26, 2024, requires employers to take “reasonable steps” to prevent sexual harassment of employees at work. The Equality and Human Rights Commission has updated to its existing guidance on sexual harassment to reflect the act’s requirements. The act doesn’t apply to Northern Ireland.

Other Forms of Discrimination

Age Discrimination. Under the Equality Act 2010, it is unlawful to directly or indirectly discriminate against, harass, or victimize an employee because of age. The act makes it unlawful to require an employee to retire on reaching a set age unless the employer can justify the requirement based on legitimate business needs.

Disability Discrimination. It is unlawful for an employer to treat a disabled person less favorably than others, and employers are required to take reasonable steps, including modifying premises, to accommodate the needs of disabled employees or potential employees.

Pay Discrimination. Under the Equality Act 2010, women are entitled to pay and conditions of work equivalent to those given men performing the same or similar duties. Grievances may be brought before an employment tribunal, which can issue an order for compensation.

Gender Pay Reporting: Employers with 250 or more employees must publish and report data showing differences in pay between male and female employees. The data must include the percentage differences in hourly pay and bonuses between men and women and the proportion of women in each pay quartile. The data must be published each year on the employer’s website within 12 months of the “snapshot date” of April 5, and must remain on the website for at least three years. The information also must be submitted to the government for publication on a federal website.

Employers with 250 or more workers also must report annually on the difference in pay between their CEO and average workers.

Ethnicity Pay Reporting: Employers in the United Kingdom are not required to collect and report workforce pay data based on employees’ ethnicity. Pay reporting on ethnicity is voluntary. However, on April 17, 2023, the government issued guidance to assist employers on how to analyze, report, and address ethnicity pay differences within their workforce. The guidance defines an ethnicity pay gap as “a measure of the difference between ethnic groups’ average earnings across an organization or the labor market as a whole over a period of time, regardless of role or seniority.”

The government guidance advises employers to consider the following when identifying and investigating ethnicity pay disparities in their workforce:

• review data issues such as confidentiality, aggregating ethnic groups, and the location of employees;
• conduct a further assessment, if needed, to understand the underlying causes of any disparities;
• report the findings internally; and
• develop an action plan to address any identified disparities.

Part-time workers may not be treated less favorably than comparable full-time workers in relation to:

• hours of work,
• promotion,
• rates of pay,
• overtime,
• profit sharing/share option schemes,
• contractual sick pay/maternity pay,
• access to occupational pension schemes,
• access to training,
• redundancy,
• other contractual benefits or
• time off work.

In some cases, an employer may be able to justify different treatment on objective grounds—for example, if it can show that different treatment is necessary and appropriate to achieve a legitimate business objective.

Employees on fixed-term contracts or hired to complete a specific project or task cannot be treated less favorably than comparable permanent employees unless this is objectively justified.

The use of successive fixed-term contracts is limited to a total four years unless the use of additional fixed-term contracts is justified on objective grounds. If a fixed-term contract is renewed after the four-year period, it will be treated as a contract for an indefinite period.

Reference Citations

Nondiscrimination: Equality Act 2010, §§ 4-19; Worker Protection (Amendment of Equality Act 2010) Act 2023

Other Forms of Discrimination: Equality Act 2010, §20; Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, no. 1551, §§ 5-7; Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, no. 2034, §§ 3-6

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: International Privacy Laws.

The Data Protection Act 2018 enshrines the GDPR into British law. For more guidance on the post-Brexit application of the GDPR, visit the website of the U.K. Information Commissioner’s Office.

See also the United Kingdom Privacy Profile.

Employee Monitoring and Surveillance

The Human Rights Act affords private employees a legal remedy to challenge abusive monitoring practices, and the Regulation of Investigative Powers Act makes it a criminal offense to intercept data without authorization, though employers are permitted to intercept e-mails and to monitor Internet access as long as both the sender and the receiver agree to it.

Employers must explain the extent of monitoring clearly in the staff handbook or contract. Employers are not allowed to monitor workers everywhere (not in the bathroom, for example).

Any processing of employee data must have a specific, explicit and legitimate purpose. Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures. Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.

Reference Citations

Employee Data: Data Protection Act 2018; General Data Protection Regulation, 2016

Employee Monitoring and Surveillance: Data Protection Act 2018; Human Rights Act of 1998; Regulation of Investigative Powers Act of 2000

Compensation

Hours of Work

The maximum workweek is 48 hours averaged over a period of 17 weeks. Employees may agree to “opt out” of the 48 hour maximum limit by giving written consent. Employers are required to keep certain records regarding working time.

Every employee in the U.K. with an employment contract longer than 26 weeks has the statutory right to request flexible working arrangements. Employees can make one request in any 12-month period, and employers must make a decision within three months of receiving a request and have a sound business reason for denying it. Sound reasons include inability to reorganize work among existing staff, detrimental impact on quality or performance and insufficiency of work during the periods the employee proposes to work.

Under the Working Time Regulations, employees are entitled to:

• a rest break of 20 minutes for every six hours of continuous work,
• 11 hours of rest per 24 hour period, and
• 24 hours of continuous rest per week (or 48 consecutive hours every two weeks).

Employees cannot work more than eight hours per night shift.

Minimum Wage

From April 1, 2023, to March 31, 2024, the hourly minimum wage rates are:

• 10.42 pounds for workers 23 years and older;
• 10.18 pounds for workers 21-22 years old;
• 7.49 pounds for workers 18-20 years old;
• 5.82 pounds for workers 16-17 year old and apprentices.
• Effective April 1, 2024, the hourly minimum wages are:
• 11.44 pounds for workers 21 years and older;
• 8.60 pounds for workers 18-20 years old;
• 6.40 pounds for workers 16-17 years old and apprentices.

Employment contracts for payments below the minimum wage are not legally binding. Part-time workers, temporary workers hired by the day, and foreign workers are also entitled to the minimum wage.

Overtime

Employers are not required to pay employees a premium for overtime work. The only requirement is that an employee’s average pay for total hours worked not fall below the national minimum wage.

Wage Payment

Employees are paid weekly, every two weeks, every four weeks, monthly, quarterly, semiannually, annually or irregularly by direct deposit, check or cash.

An employee must be issued a written payslip at or before each time wages are paid. The payslip, which may be electronic or sent by email, must show gross pay, net pay, deductions for taxes, NICs and any fixed deductions such as union dues. An employer must provide each employee and pension recipient with a year-end summary of total pay, taxes, NICs and deductions (Form P60) in either electronic or paper form by May 31.

An employer cannot deduct any amount from an employee’s salary unless that deduction is authorized by law or by the employee in writing at the time of the proposed deduction or in advance as a term of the contract of employment.

Mandatory Bonuses

Bonus arrangements typically are agreed in the contract between the employer and the employee. Bonuses can be entirely discretionary, but employers must be careful not to allocate them in a discriminatory manner.

Reference Citations

Hours of Work: Working Time Regulations 1998, No. 1833, §§ 4-12

Minimum Wage: National Minimum Wage Act 1998, §§ 9, 23; National Minimum Wage and National Living Wage Rates

Wage Payment: Employment Rights Act 1996, §§ 8, 13

Benefits

Vacation

Under the Working Time Regulations, full-time employees are entitled to a minimum of 28 days of paid annual leave each year. Unless the employment contract states otherwise, the annual leave entitlement includes bank holidays. Vacation pay is usually based on the average pay over the 52 weeks prior to the vacation, or the number of weeks of employment if the worker has been with the employer for less than 52 weeks.

Payment cannot be substituted for days off except where the worker’s employment is terminated. Employees start to accrue annual leave from the start of their employment. During the first year of employment, annual leave accrues at the rate of one-twelfth of a full year’s entitlement at the beginning of each month.

Employees entitled to 28 days’ leave per year can carry over up to eight unused days of annual leave into the next year. Under an exception introduced by the Working Time (Coronavirus) (Amendment) Regulations 2020, employees may be able to carry over untaken leave into the next two years if they cannot take it because their work is affected by Covid-19.

The general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take (e.g. 2 days’ notice for 1 day’s leave). An employer can refuse a leave request but they must give as much notice as the amount of leave requested (e.g. 2 weeks’ notice if the leave requested was 2 weeks).

Holidays

England and Wales recognize eight public holidays, also known as bank holidays, while Scotland recognizes nine and Northern Ireland recognizes ten. The seven holidays that are collectively recognized by England, Wales, Scotland, and Northern Ireland are as follows:

• New Year’s Day;
• Good Friday;
• Early May bank holiday (early May, precise date varies year to year);
• Spring bank holiday (late May, precise date varies year to year);
• Summer bank holiday (late August, precise date varies year to year);
• Christmas Day; and
• Boxing Day

.

The additional public holiday recognized by England and Wales is Easter Monday, the Monday immediately after Easter Sunday.

The additional public holidays recognized by Scotland are:

• The second day of the new Gregorian Calendar year; and
• Nov. 30: St. Andrew’s Day.

The additional public holidays recognized by Northern Ireland are:

• March 17: St. Patrick’s Day;
• Easter Monday, the Monday immediately after Easter Sunday; and
• July 12: Battle of the Boyne (Orangemen’s Day).

In the U.K., bank holidays do not have to be given as paid leave. Employers can choose to include bank holidays as part of a worker’s statutory annual leave.

When employees work on a national holiday, they have no statutory right to extra pay.

Maternity Leave

Pregnant employees are entitled to 52 weeks’ maternity leave. The first 26 weeks is known as ‘Ordinary Maternity Leave’ (OML), the last 26 weeks as ‘Additional Maternity Leave’ (AML). Although employees do not have to take all 52 weeks of their maternity entitlement, they must take two weeks’ leave once the baby is born. It is a criminal offense for an employer to allow an employee to return to work within two weeks of giving birth. The earliest that leave can be taken is 11 weeks before the expected week of childbirth.

Pregnant employees are entitled to receive up to 39 weeks of statutory maternity pay (SMP) if they have worked for the employer for at least 26 weeks and up to the 15th week before the expected week of childbirth and must have given the correct notice and proof of pregnancy. For the first six weeks, statutory maternity pay is payable at 90 percent of the employee’s average weekly gross pay. For the remaining 33 weeks, statutory maternity pay is payable at a basic weekly amount or 90 percent of the employee’s average weekly gross pay, whichever is lower. Effective starting Apr. 2, 2023, the basic weekly amount is 172.48 pounds. Effective from Apr. 3, 2022, to Apr. 1, 2023, the basic weekly amount was 156.66 pounds.

Employees who suffer the loss of a child or a stillbirth are entitled to two weeks’ paid bereavement leave. The leave applies to all employees who suffer the loss of a child under the age of 18 or whose child is stillborn after 24 weeks of pregnancy. Employees may either take the leave as a two-week period or in two one-week increments in the 12 months following the loss. To be eligible for statutory bereavement pay, employees must have accrued 26 weeks’ continuous service with their employers, and have weekly average earnings over the lower earnings limit.

Employers can recover most of the cost of statutory maternity pay from the state. Many employers make payments in addition to this statutory minimum.

During the maternity leave, the contract of employment continues and the employee is entitled to receive all her contractual benefits except commission, contractual bonus, wages and salary.

A woman returning to work from pregnancy leave must be reinstated to her former position or, if she takes more than 26 weeks of maternity leave, must be given an equivalent job, unless the employer qualifies for certain statutory exceptions.

Dismissal on grounds of pregnancy is invalid and qualifies as sex discrimination.

Effective from Apr. 6, 2023, to Apr. 5, 2024, unchanged from Apr. 6, 2022, to Apr. 5, 2023, to qualify for maternity pay, the employee also must have earned at least the lower earnings limit of 123 pounds of gross pay per week as averaged over eight weeks.

Shared parental leave. In England, Scotland, and Wales, if an employee chooses to end maternity or adoption leave or pay before the statutory period ends, the remaining leave or pay may be shared between both parents. The employee must return to work, or give notice that they are to return to work, and give notice that they wish to start Shared Parental Leave. To qualify for both leave and pay, an employee must have worked for the same employer continuously for at least 26 weeks by the end of the 15th week before the expected week of childbirth or by the end of the week of notice of an adoption match and must have given proper notice. To share the leave, the employee’s partner must be employed for at least 26 weeks in the 66 weeks before the week of the birth or adoption and must have been earning at least 30 pounds a week over any period of 13 weeks.

Effective from Apr. 6, 2023 to Apr. 5, 2024, unchanged from Apr. 6, 2022, to Apr. 5, 2023, to qualify for shared parental pay, the employee also must have earned at least the lower earnings limit of 123 pounds of gross pay per week as averaged over eight weeks.

Shared parental pay is payable at a basic weekly amount or 90 percent of the employee’s average weekly gross pay, whichever is lower. Effective starting April 3, 2022, the basic weekly amount is 156.66 pounds. Effective from April 4, 2021, to April 2, 2022, the basic weekly amount was 151.97 pounds.

Paternity Leave

To be eligible for paternity leave, an employee must be one of the following:

• the father;
• the husband or partner of the mother (or adopter) - this includes same sex partners;
• the child’s adopter; or
• the intended parent if having a child through a surrogacy arrangement.

Statutory Paternity Pay (SPP) is payable at a basic weekly amount or 90 percent of the employee’s average weekly gross pay, whichever is lower. Effective from Apr. 2, 2023, the basic weekly amount is 172.48 pounds. Effective from Apr. 3, 2022, to Apr. 1, 2023, the basic weekly amount was 156.66 pounds.

To qualify for both leave and pay, an employee must have worked for the same employer continuously for at least 26 weeks by the end of the 15th week before the expected week of childbirth or by the end of the week of notice of an adoption match and must have given proper notice.

Effective from Apr. 6, 2023, to Apr. 5, 2024, unchanged from Apr. 6, 2022, to Apr. 5, 2023, to qualify for SPP, the employee also must have earned at least the lower earnings limit of 123 pounds of gross pay per week as averaged over eight weeks.

An employee returning from paternity leave must be returned to his former position.

Sick Leave

Effective Apr. 6, 2023, to Apr. 5, 2024, employees generally are entitled tostatutory sick pay (SSP) of 109.40 pounds per full week of seven days, for up to 28 weeks. Effective from April 6, 2022, to Apr. 5, 2023, the amount was 99.35 pounds. An employment contract may provide for a higher amount of paid sick leave, which is known as contractual sick pay. Statutory annual leave continues to accrue while the employee is off work sick and can be taken during sick leave. SSP is paid when the employee is sick for four days in a row including non-working days, starting on the fourth day.

Effective from Apr. 6, 2023, to Apr. 5, 2024, unchanged from Apr. 6, 2022, to Apr. 5, 2023, to qualify for statutory sick pay, an employee needs to earn at least the lower earnings limit of 123 pounds per week in gross pay and give proper notice.

Employees are not eligible for SSP if they are receiving maternity, paternity, or adoption pay; maternity allowance; or have already received the maximum 28 weeks of SSP, among other exceptions

Employers are required to keep records of sick payments.

Other Leave

Adoption leave. Eligible employees may take up to 52 weeks of ordinary adoption leave. The first 26 weeks is known as ordinary adoption leave, and the last 26 weeks as additional adoption leave. Leave can start up to 14 days before the child starts living with the employee for an adoption within the United Kingdom.

Statutory Adoption Pay (SAP) can be paid for up to 39 weeks. For the first six weeks, statutory adoption pay is payable at 90 percent of the employee’s average weekly gross pay. For the remaining 33 weeks, statutory maternity pay is payable at a basic weekly amount or 90 percent of the employee’s average weekly gross pay, whichever is lower. Effective Apr. 2, 2023, the basic weekly amount is 172.48 pounds. Effective from Apr. 3, 2022, to Apr. 1, 2023, the basic weekly amount was 156.66 pounds.

Long-term care leave. Effective Apr. 6, 2024, employees may take one week of unpaid leave, meaning the number of days an employee normally works in a seven-day period, per 12 months to provide or arrange long-term care for a dependent. A dependent is a spouse, civil partner, parent, or child; somebody living in the same household as the employee who is not their tenant, boarder, lodger, or employee; or anyone else who must “reasonably rely” on the employee to provide care. Long-term care includes an illness or injury that is likely to require more than three months of care, disability, or old age.

Parental bereavement leave . Employees are eligible for up to two weeks of leave following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees are entitled to paid leave at the statutory rate and other employees are entitled to unpaid leave. The leave can be taken up to 56 weeks from the date of the death of the child. The leave can be taken as either a single block of two weeks or as two separate blocks of one week. Maternal deaths: Amendments to the paternity leave law remove the normal continuous-service requirement in situations where the birth or adoptive mother dies. The Paternity Leave (Bereavement) Act 2024 eliminates in those situations the requirement that an employee must have worked for the same employer continuously for at least 26 weeks by the end of the 15th week before the expected week of childbirth or by the end of the week of notice of an adoption match.

Pensions and Social Security

All employers are required to automatically enroll their employees into a pension plan. Employers can use the independently run, government-backed defined contribution plan, National Employment Savings Trust (NEST), or their own plan, which could be either a defined contribution plan or a defined benefit plan.

Employees who have been automatically enrolled can opt out within one month of enrollment, or can stop all contributions after the one-month deadline has expired. An employee may withdraw NEST funds starting at age 55 and before age 75.

The Pensions Regulator, an executive nondepartmental public body, sponsored by the Secretary of State for Work and Pensions, regulates work-based pension plans (usually called “schemes” in the United Kingdom) that an employer makes available to employees.

The employer is primarily responsible for the deduction of National Insurance contributions (NICs) from salary or wages through the PAYE (Pay As You Earn) system and for the payment of these sums to Her Majesty’s Revenue & Customs (HMRC). NICs help to fund many benefits and services including the National Health Service, state-provided pensions, statutory leave benefits and workers’ compensation. Generally, all employees who are under state pension age but older than age 16 and earn more than certain thresholds pay NICs. Employees may also make voluntary contributions to fill gaps in their record. The state pension age is to increase to 67 for men and women through March 2028, with the specific effective date of the increased state pension age varying among individuals based on their date of birth in accordance with the U.K.’s State Pension Age Timetables. Further increases to the state pension age are to occur with varying implementation dates based on individuals’ date of birth.

Workers’ Compensation

Employers must maintain insurance against liability for bodily injury or disease sustained by employees in the course of their employment. The policy must cover the entity for at least 5 million pounds.

Reference Citations

Vacation: Working Time Regulations 1998, No. 1833; Working Time (Amendment) Regulations 2001, No. 3256; Working Time (Amendment) Regulations 2007, No. 2079; Holiday Entitlement

Holidays: Banking and Financial Dealings Act 1971, ch. 80; U.K. Bank Holidays

Maternity Leave: Employment Rights Act 1996, ch. 18 §§ 71-75; Children and Families Act 2014, Part 7; Maternity Pay and Leave

Paternity Leave: Employment Rights Act 1996, ch. 18 §§ 80A-80E; Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002

Sick Leave: Social Security Contributions and Benefits Act 1992, § 151

Other Leave: Children and Families Act 2014, § 75G; Shared Parental Leave and Pay; Parental Bereavement Leave Act, 2018, § 80EA; Parental Bereavement Leave and Pay Consultation, Government Response, 2018

Pensions and Social Security: National Employment Savings Trust; National Insurance

Workers’ Compensation: Employers’ Liability Act 1969; Industrial Injuries Disablement Benefit

Labor Relations

In General

Employees have the right to join or not join a trade union, decide to leave or remain a member of a trade union and belong to more than one trade union. An employer must recognize a trade union for collective bargaining purposes if certain criteria are met. Collective bargaining agreements are relatively uncommon in the U.K. and are generally not intended to be legally binding.

Right to Organize

Employees have the right to join or not join a trade union, decide to leave or remain a member of a trade union and belong to more than one trade union.

An employer must recognize a trade union for collective bargaining purposes if certain criteria are met. There are in addition general requirements that an employer inform and consult with employees or their representatives in cases of collective dismissal (dismissals of 20 or more employees) or sale of a business. An employer failing to comply with these obligations may have to compensate employees and may face a finding of unfair dismissal.

Collective bargaining agreements are relatively uncommon in the U.K. and in any event do not have the same status and authority as in many other European countries. Generally speaking, collective bargaining agreements are not intended to have legal effect unless this is specifically stated in the agreement. Collective bargaining arrangements may be included in individual employees’ contracts of employment, however, either expressly (verbally or in writing) or as a result of custom and practice.

It is unlawful to refuse a person employment on the grounds of membership or nonmembership in a trade union.

Works Councils

Employees of large multinational companies based in the U.K. and with a presence elsewhere in Europe have a right to ask for a European Works Council to be set up. A European Works Council (EWC) is a consultative body representing the European workforce of a multinational organization or business. The main purpose of an EWC is to establish a dialogue with the European central management of the multinational so that the decisions taken by them or local management are informed by the views of the workforce.

The law on EWCs applies to multinationals which have:

• at least 1000 employees in the European Economic Area (EEA), and
• at least 150 employees in each of at least two EEA member states.

Dispute Resolution

The U.K.’s Advisory, Conciliation and Arbitration Service (ACAS) has developed a Code of Practice that provides basic practical guidance to employers, employees and their representatives for handling disciplinary and grievance situations in the workplace. A failure to follow the code, which was issued under the Trade Union and Labour Relations Act 1992, does not, in itself, make an employer liable to proceedings. However, employment tribunals will take the code into account when considering relevant cases.

Collective agreements tend to contain lengthy grievance procedures, which can include consultation and/or arbitration, that must be exhausted before matters can be taken further.

Strikes and Lockouts

Peaceful picketing during industrial action is generally allowed but must be restricted to the employees’ own place of work. Neither individuals nor unions can be sued for properly constituted strike action.

A trade union can only call for a strike if a majority of its members involved support it in a properly organized postal vote called a ‘ballot’. Before organizing a ballot, a union must decide which members affected by a dispute it wants to ask to strike. It must tell all members entitled to vote and the employer what the ballot results were.

A trade union calls for a strike by telling members and the employer when and how this action will be taken. This should be done by a trade union official or committee that has the legal right to do so.

Effective July 21, 2022, employers can hire temporary workers to cover the duties normally performed by employees who are taking part in a strike or other industrial action.

Successorship Clauses

When ownership of a business or part of a business is transferred, employees are protected by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The basic test of whether TUPE applies to a business transfer is whether an economic entity retains its identity after the transaction.

In determining whether TUPE applies, all relevant facts need to be considered, including:

• whether tangible assets (such as telephones or computer equipment) and intangible assets (such as goodwill and debts) are transferred,
• the degree of similarity between the activities carried on before and after and
• whether a “major part” of the employees are transferred.

TUPE also applies to service provision changes, including:

• outsourcing of activities from a client to a contractor,
• transfer of activities from one contractor to another and
• transfer back of activities from a contractor to the client.

On completion of the transfer, all rights, powers, duties and liabilities under existing employment contracts are automatically transferred from the original employer to the new employer (i.e., the buyer or contractor). Contractual indemnities and other arrangements can be put into place to ensure that much of the economic burden of transferred employees (including any rights arising on redundancy or dismissal) remains with the original employer or is divided appropriately between transferrer and transferee.

TUPE has three main effects:

• the new employer is obliged to take on all transferred employees on the same terms and conditions they were employed by the original employer,
• both the new and the original employer are obliged to inform and if necessary consult employee or trade union representatives of all employees affected by the transfer and
• any dismissal of an employee with 12 months’ or more continuous service because of the transfer will be automatically unfair.

Reference Citations

Right to Organize: European Convention on Human Rights, Nov. 4, 1950, art. 11

Works Councils: Transnational Information and Consultation of Employees Regulations 1999, No. 3323

Dispute Resolution: Trade Union and Labour Relations Act 1992, § 199; Code of Practice on Disciplinary and Grievance Procedures

Strikes and Lockouts: Trade Union and Labour Relations Act 1992, §§ 219, 244

Successorship Clauses: Transfer of Undertakings (Protection of Employment) Regulations 2006, §§ 5-6

Safety, Health and Security

In General

Under the Health and Safety at Work Act 1974, an employer is under a general duty to guarantee the safety of all employees and can be held liable for accidents caused by employees acting in the course of their employment. Employers must maintain insurance against liability for bodily injury or disease sustained by employees in the course of their employment and are required to assess risks to the health and safety of workers and to keep a record of these assessments.

Workplace Safety and Health

Under the Health and Safety at Work Act 1974, an employer is under a general duty to guarantee the safety of all employees and can be held liable for accidents caused by employees acting in the course of their employment.

The employer can be subject to civil and criminal liability for failure to meet its health and safety responsibilities, and officers of a company can be held personally liable.

Employers must maintain insurance against liability for bodily injury or disease sustained by employees in the course of their employment and are required to assess risks to the health and safety of workers and to keep a record of these assessments. Employees should be informed about workplace health and safety matters.

Employers must provide personal protective equipment (PPE) to employees free of charge if a risk assessment shows that it is needed. Employers also must ensure that workers have sufficient information, instruction, and training on PPE use. On April 6, 2022, the government expanded this requirement to include limb workers, which refers to workers who generally have a more irregular employment relationship and work under a contract for service.

On April 1, 2022, the U.K. Health Security Agency published guidance for employers in England on reducing the spread of respiratory infections, including Covid-19, in the workplace.

Employers reporting incidents under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) must file a report when:

• an accident or incident at work has, or could have, led to the release or escape of coronavirus. This must be reported as a dangerous occurrence;
• a person at work has been diagnosed as having Covid-19 attributable to an occupational exposure to coronavirus. This must be reported as a case of disease;
• a worker dies as a result of occupational exposure to coronavirus. This must be reported as a work-related death due to exposure to a biological agent.

Drug and Alcohol Use

Smoking in enclosed workplaces in England is not permitted. Workers can be fined up to 200 pounds, or up to 50 pounds in Scotland. Employers must display ‘no smoking’ signs in all workplaces and vehicles; in Wales the signs must be in both Welsh and English. Staff smoking rooms aren’t allowed - smokers must go outside.

Employers can be fined up to 2,500 pounds if they don’t stop people smoking in the workplace or up to 1,000 pounds if they don’t display ‘no smoking’ signs. In Scotland, there is a fixed penalty fine of 200 pounds, which can go up to 2,500 pounds if the fine isn’t paid.

Reference Citations

Workplace Safety and Health: Health and Safety at Work etc. Act 1974, ch. 37, §§ 2, 37

Drug and Alcohol Use: Smoke-free (Premises and Enforcement) Regulations 2006, no. 3368; Smoke-free (Signs) Regulations 2012, no. 1536; Smoke-free (Penalties and Discounted Amounts) Regulations 2007, no. 764 § 2

Termination

Termination by Employer

Under the Employment Rights Act 1996, employees who have completed one month’s continuous service are entitled to a minimum one week’s notice of termination. After two years’ service, employees are entitled to one week’s notice per year of service up to a maximum 12 weeks’ notice after 12 years of service. Employment contracts may contain more generous provisions, and U.K. employers often agree to give employees at least one month’s notice of termination from the start of employment and senior employees between three and six months’ notice.

Compensation may be payable to employees who have more than one year of continuous service at their date of dismissal if they are unfairly dismissed. Fair dismissal under the act may be based on:

• capability,
• conduct,
• redundancy,
• statutory requirement or
• some other substantial reason.

For the dismissal to be regarded as fair, the employer must follow an objective procedure.

When terminating a worker’s employment, employers are urged to follow the ACAS (Advisory, Conciliation and Arbitration Service) Code of Practice. Failure to follow the code does not automatically result in an unfair dismissal, but noncompliance can be considered by an employment tribunal in determining whether a dismissal is fair.

An employee who has been unfairly dismissed has the right to request reinstatement, although in practice this form of redress is rarely granted by employment tribunals.

Plant Closings and Mass Layoffs

When proposing to make 20 or more employees redundant at one establishment within a period of 90 days, an employer must:

• consult with any recognized trade union or other elected employee representatives;
• start consultation in good time—at least 30 or 45 days before the first dismissal takes effect depending on the number of proposed redundancies;
• consult on ways of avoiding dismissals, reducing the numbers to be made redundant and mitigating the effect of the dismissals;
• disclose in writing to the appropriate representatives certain information concerning the proposed dismissals and
• notify the Secretary of State for Business, Innovation and Skills at least 30 or 45 days in advance of the first dismissal taking effect, depending on the number of proposed redundancies.

To ensure employee representatives can play a useful part in the consultation process over proposed redundancies employers must disclose certain information in writing including:

• reasons for the proposed redundancies;
• numbers and descriptions of employees affected;
• proposed method of selecting the employees who may be dismissed;
• proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period over which the dismissals are to take effect and
• how redundancy payments, other than the legal minimum, will be calculated.

Payment on Termination

On termination, employees are entitled to all wages due through the last day of work or to payment in lieu of those wages. Employees also have a right to compensation if they are dismissed because of redundancy, the amount ranging from half a week’s pay to one and a half weeks’ pay for each year of service.

Employees employed before April 6, 2012, with one year’s continuous service and employees employed on or after April 6, 2012, with two years’ continuous service have a right to compensation if they are dismissed because of redundancy. Redundancy payments are calculated on a sliding scale depending on age and length of service. An employee who unreasonably refuses an offer of suitable alternative employment is not entitled to a redundancy payment.

Under the Employment Rights Act 1996, compensation may be payable to employees who have more than one year of continuous service at their date of dismissal if they are unfairly dismissed. If employees are found to have been unfairly dismissed, they may be compensated by a basic award and a compensatory award. The basic award is calculated on the same basis as a redundancy payment.

British law allows employers to enter into legally binding “settlement agreements” with terminated employees that provide for the waving of certain potential employee claims in exchange for a cash settlement.

Any offer made or discussions held with a view to ending the employment relationship can be made on a confidential basis and cannot be used as evidence in any subsequent unfair dismissal claim. This effectively extends to situations in which no dispute exists, the existing rule providing that where a dispute does exist any statement made during a “without prejudice” (off the record) discussion cannot be relied on in court or at a tribunal as evidence. There are certain circumstances under which this rule does not apply, however, namely where the employer has acted improperly or where the employee claims to have been dismissed for an automatically unfair reason, such as whistle-blowing or discrimination.

Employers can offer employees an exchange of certain employment protections for tax-advantaged employer stock grants. Under the government plan, employee rights to claim unfair dismissal and to receive statutory redundancy pay are restricted in exchange for an employer grant of stock. Employee participation is voluntary, and the law protects workers from employer retaliation if they choose not to participate.

The maximum compensatory award for unfair dismissal is the lower of 12 months salary and 93,878 pounds. The limit on a week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal is 571 pounds.

Unemployment Insurance

The unemployment insurance scheme in the U.K. is known as the Jobseeker’s Allowance and is funded by employee contributions to the National Insurance program. Contribution rates range from 2 percent to 12 percent of wages depending on compensation. Employers withhold contributions from employee pay and remit them to the government but do not themselves contribute.

It is administered by the Department for Work and Pensions in England, Scotland and Wales, and the Social Security Agency in Northern Ireland.

To be eligible for benefits, individuals must:

• be 18 years of age or older,
• be available for work,
• be actively seeking work,
• not be a full-time student and
• work, on average, less than 16 hours per week.

The amount that individuals can claim depends on their income and savings and whether they are claiming as an individual or a couple.

Reference Citations

Termination by Employer: Employment Rights Act 1996, §§ 86, 112; Make a Claim to Employment Tribunal

Plant Closings and Mass Layoffs: Trade Union and Labour Relations (Consolidation) Act 1992, § 188

Payment on Termination: Employment Rights Act 1966, §§ 22, 155

Unemployment Insurance: Jobseekers Act 1995, § 1; Jobseeker’s Allowance (JSA)

Personal Taxes

Residency Requirements

An individual is regarded as being domiciled in the U.K. for tax purposes if the individual:

• is present in the U.K. for 183 days or more in a tax year,
• has only one home and that home is in the U.K. (or has two or more homes and all of these are in the U.K.) or
• carries out full-time work in the U.K.

There are also a series of “connecting factors” that can be taken into account if none of the above applies, including whether the individual spent 90 days or more in the U.K. in either of the previous two tax years or if his or her family is resident in the U.K.

Taxable Income

Residents of the U.K. are subject to tax on their worldwide income, nonresidents on U.K.-sourced income only.

Taxable income includes wages or salary, fees, bonuses and commissions, holiday pay, statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay. The employee may also be subject to income tax on certain noncash benefits, such as a company car available for private use, living accommodations or employer-paid medical insurance.

Expatriate employees are liable for income tax and National Insurance (social security). As in the U.S., the employer withholds taxes from wages on a pay-as-you-earn basis.

Tax Rates

Income tax rates are levied on a progressive scale, with rates ranging from 20 percent to 45 percent. Employees in the United Kingdom are able to earn an amount of income each year that is excludable from income tax, and this amount is known in the United Kingdom as a personal allowance. As per the availability of the personal allowance, the United Kingdom’s income tax brackets are commonly presented by the government in two ways, one with only taxable income included, and one with the standard personal allowance included as part of overall income. In some years, the standard personal allowance available to employees varies by age.

The return must be filed electronically by January 31 following the end of the tax year. Where the return is filed manually the filing date is October 31 in the year. There is no extension to these dates.

Reference Citations

Taxable Income: Income Tax (Guide)

Tax Rates: Income Tax Rates and Personal Allowances

Web References

Law and Regulation

ACAS Codes of Practice

Data Protection Act 1998

Employment Rights Act 1996

Equality Act 2010

Health and Safety at Work Act 1974

Human Rights Act 1998

Police Act 1997

Regulation of Investigative Powers Act 2000

The Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000

The Transfer of Undertakings (Protection of Employment) Regulations 2006

The Working Time Regulations 1998

Government Websites and Publications

Department for Business Innovation & Skills

Department for Work & Pensions

National Employment Savings Trust

National Employment Savings Trust, Employer Help Center

Pensions Regulator

U.K. National Statistics

Other Websites and Publications

Labour Research Department