Redundancy regulations are changing – What it means for your payroll and policies

From 6 April 2024, UK redundancy rules will change, particularly surrounding pregnant employees and those on family-related leave.  

The new legislation extends the ‘protected period’ for redundancy to 18 months after the birth or adoption placement, requiring employers to prioritise these employees for suitable alternative employment in case of redundancies.  

The financial impact on your business, because of these changes, could be significant too if you must consider making redundancies.

You will likely face higher operational costs as you must now retain staff or find them alternative roles instead of making them redundant.  

The tax treatment of redundancy payments, which are tax-free up to £30,000, will also need careful consideration to ensure compliance with HM Revenue & Customs (HMRC).  

Adjustments in payroll and HR practices should also be considered, and you will need to update your redundancy policies and consultation process to align with the new rules.

From a purely payroll perspective, these changes make it all the more important to accurately track maternity, adoption, or shared parental leave.  

By preparing now, you can ensure that you meet these new requirements, minimise financial risk, and support your employees effectively during these critical life stages.  

If you require further guidance or information on payroll changes relating to redundancy, please don’t hesitate to get in touch.