Payroll & HR Challenges For 2020

6th January 2020

As well as the usual year-end reviews and tax considerations, in the early part of 2020 payroll and HR teams up and down the country will have several new challenges on their hands. Stay ahead of the game and do your research now, by reading about our predictions for the main payroll challenges for 2020.

Payroll 2020 Updates

There are several legislative aspects that payroll professionals need to be aware of going in to 2020, which are likely to come into effect in the UK’s new financial year; 6th April 2020.

Holiday pay changes

The ‘pay reference period’ for those working irregular hours is going to change from 12 weeks to 52 weeks. This means that holiday entitlement for such employees will be calculated by averaging the number of hours worked over 52 weeks, rather than 12.

Parental Bereavement Leave & Pay Act

Passed in 2018; this legislation is likely to come into being in April. It means that parents will have a right to two weeks of leave after a child (under 18) dies, or there is a stillbirth after 24 weeks of pregnancy. This could be unpaid or paid (statutory bereavement pay) depending on whether they have worked 26 weeks of service or not.

Agency worker rights

2020 will see the introduction of three new lawful rights for agency workers;

  • Agency workers must be paid the same as permanent members of staff in the equivalent role, after 12 weeks.
  • Employed agency workers will be protected from unfair dismissal or suffering a detriment, if reasons are related to asserting rights associated with The Agency Worker Regulations.
  • Agency workers will be entitled to a clear document detailing their employment relationships and agency terms and conditions.

National Living Wage increase in 2020

The current National Living Wage for those aged over 25 is currently £8.21 per hour, however Chancellor of the Exchequer Sajid Javid has said he wants it to be increased to £10.50 within the next five years. While the projected rate for next year is currently £8.67, it is worth keeping in mind the potential need to rearrange your company’s 2020 payroll budget.

Change in student loan repayment threshold

As of April 2020, the repayment thresholds for pre and post 2012 student loans will increase. Plan 1 (pre-2012) loans will need to be repaid after an employee has reached a salary of £19,390, and Plan 2 (post-2012) loans after £26,575. This will need to be taken into account by payroll professionals when making Student Loan deductions.


The outcome of Brexit is yet to be determined, but business owners and payroll professionals need to be prepared for all eventualities. Find out more about the impact of Brexit on SMEs.

HR Challenges in The Future

In addition to payroll challenges, 2020 is likely to see a number of HR challenges that will impact on HR professionals across the UK.

Sexual Harassment in the workplace

10 years on from the Equality Act 2010, the government is taking a close look at how thoroughly employees are protected from sexual harassment at work, and whether or not the existing legislation could go further.

Additional family support

There is discussion among MPs about ways in which families can be better supported with their work-life balance. It includes ideas such as neonatal leave and pay for those who have babies who require special care after birth, and transparency of flexible working opportunities.

Increased protection of new parents

Pregnant women and new mothers will be protected from redundancy for an additional six months, meaning they will now be protected for up to two years. This includes adoptive parents.

Introduction of employment rights enforcement body

There is current conversation in government regarding the idea of creating one body to enforce and address employment rights for businesses and employees. This would include rights regarding everything from health and safety to discrimination, and modern slavery.

Believe it or not, these are really just a handful of the potential HR and payroll challenges that business will be met with in the coming year. One way to ensure you achieve compliance with all new payroll legislation is to outsource your payroll. To properly prepare yourself for the upcoming tax year, download our comprehensive guides below.

Download our Top Ten UK Payroll Issues 2020 ebook today to:

  • Plan for the upcoming changes;
  • Learn where you can go for further information;
  • Ensure your company isn’t going to fall victim to expensive, reputationally-damaging slip-ups.

Download our Top Ten UK HR Issues 2020 ebook today to learn about:

  • Proposals to support families
  • Changes to confidentiality clauses
  • The Good Work Plan
  • Plus more.


A Guide to Payroll Outsourcing

This guide aims to show you how payroll outsourcing works and key things you need to consider. This will give you a better idea of what to expect from the service and how it can benefit your business. At IRIS FMP we work with organisations from all sectors to ensure their payroll is processed accurately and on time. We know all there is to know about payroll outsourcing and how to make it work for you.

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