The EU Legislation Affecting Payroll

Posted on 20th October 2023

The EU Legislation Affecting Payroll

The EU has a set of labour laws affecting payroll that cover minimum requirements on working conditions, such as wages, working time, worker’s rights, and other information about the crucial aspects of employment and labour.

EU-based companies with full or part-time workers or hiring contractors should know their legal obligations. These laws protect employees and ensure a safe workplace free from discrimination.

Below, check out the EU legislation affecting payroll.

Pregnancy and Family Leave

The EU legislation sets out minimum standards for pregnancy and family leave, covering paternity, parental, and carer’s leave. It also establishes additional rights, such as requesting a flexible working arrangement. These laws complement maternity leave rights.

As stated in the Maternity and Parental Leave Regulations, an employer should provide those on maternity, paternity, or other parental leave with alternative employment as they go through the redundancy process. It should take precedence over other employees laid off by the company in question. Recent changes to the legislation aim to extend such protection. The employee should remain secure with the company for 18 months. It starts when they inform the employer of the pregnancy or adoption date.

The legislation establishes that a woman on maternity leave is entitled to go back to her post on terms and conditions that are not less favourable to her. She should receive the benefits entitled to her, including improvements in working conditions and other benefits she should receive during her absence.

Working men and women in the EU should be protected from dismissal by taking paternity or maternity leave. They should be able to return to their jobs and will receive all benefits entitled to them while absent from work.

Statutory Paternity Pay

Statutory paternity pay is a hot topic in Europe. In April 2022, EU member states were required to provide a minimum of ten days of paid paternity leave due to the new directive on work-life balance for parents and carers, aiming to promote gender equality.

On the other hand, the UK government wants to amend their current legislation by providing fathers with more flexibility over how and when they should go on paternity leave. Because of this, employees can now go on paternity leave in one or two-week blocks in the first eight weeks after their baby is born or adopted. While on paternity leave, they will receive statutory pay equivalent to 90% of their average weekly earnings or £172.48, whichever is lower.

In addition, the amended legislation allows them to split their leave into two blocks of one week each. They can also go on paternity leave at any point in the first year of their child’s birth or adoption. However, before they can do so, they must inform their employer 15 weeks before their child’s expected arrival and four weeks before every leave period.

Retained European Union Law

The Retained EU Law, also known as the Revocation and Reform Act, makes significant changes to the domestic body of law currently called the “retained EU law.” It’s a UK domestic law created from the EU Withdrawal Act of 2018 and came into effect during the post-Brexit transition period.

The primary aim of the retained EU law is to offer legal certainty and continuity to minimise substantive changes in UK domestic law during the transition period. It preserves the domestic legislation implemented by the EU by converting some parts of EU law into their domestic equivalent.

The Retained EU Law has made significant changes in the overall framework of the Retained EU Law. By the end of 2023, the law will revoke parts of the EU-origin legislative instruments.

What does this mean for payroll? The majority of existing UK payroll and HR legislation originates from the EU and is now being reviewed for suitability. Working Time Regulations, which changed the record-keeping requirements for employees who want to opt out, and the merger of the current annual leave entitlements stated in Sections 13 and 13A highlight the importance of specialist firms like specialists in payroll recruitment in assisting companies in navigating these complex legal frameworks and ensuring compliance with the latest changes.

Work / Life Balance

The 2023 Work-Life Balance Provisions Act allows those caring for children to take more leave and work in a way deemed appropriate for their family. Under this new provision, parents and carers qualify for five core employee rights.

The first right entitles the employee to five days of unpaid leave for medical care purposes for parents of kids under 12 years old. It also applies to carers. Next, employees who are victims of domestic violence have the right to go on five days’ leave. Parents and carers will also have the right to flexible working hours.

The Work-Life Balance Provisions Act also gives employees the right to opt for a remote work setup. They can also request that the breastfeeding breaks at work be moved to two years from six months. Two of the new rights came into effect in July 2023. These are the extension of entitlement for breastfeeding breaks and the right for parents and carers to go on a five-day unpaid leave if they have kids under 12.

Revealing Pay Data

Talking about salaries in the workplace is taboo for many companies in the UK. But in today’s younger generations of workers, the views on revealing pay data have changed. Pay secrecy has become a hot topic since workers allege that it causes pay disparity in the workplace. Such criticism has led to the enforcement of the Equality Act of 2010.

The provision places restrictions on pay secrecy clauses and has made them unenforceable. It means that if employees do not adhere to pay secrecy in their employment contract, their employers cannot take legal action against them.

Currently, there are no laws in the UK that force employers to share details about their employees’ wages. However, there’s a law requiring qualifying businesses to report the gender pay gap. The pilot scheme suggests future legislation change.