Employment law: What tech entrepreneurs need to know in 2018
This article, co-authored by Clare Gilroy-Scott and Becky Minear, part of the employment team at Goodman Derrick LLP, outlines the top three employment changes tech entrepreneurs need to be aware of this year.
Last year was a significant year for employment law developments, many of which will undoubtedly flow into 2018.
With this in mind, we’ve decided to take a look at the top issues that HR practitioners in the technology sector, should be aware of this year.
1. Gig economy and employment status issues
Uncertainty in employment status continued to be scrutinised throughout 2017, the focus being on gig economy workers who work on short-term, “gig”-like assignments working for on-demand service companies such as Uber and Deliveroo and others operating through tech platforms.
Uber’s drivers claim they are workers, entitled to minimum wage and holiday pay. Uber’s position is that it is a tech company that facilitates taxi rides, operating as an agent for self-employed drivers to source work, not a transportation services company – an argument that has not yet been accepted in the tribunals. Google have recently been criticised in relation to the way it treats individuals in contracts with to check its advertising algorithms.
The Taylor Review on Modern Working Practices in 2017 called for greater clarity over employment status definitions to ensure that “workers” benefit from basic employment rights e.g. holiday pay. The Review made recommendations including a “dependent contractor” status. Draft legislation has been prepared based on the recommendations aiming to close the loopholes that are currently allowing potential exploitation of workers and considering a new “worker by default” status – placing the onus on companies to prove that the worker’s status is otherwise and a response is expected in 2018.
In King v Sash Window Workshop the ECJ ruled that a worker incorrectly categorized as self-employed and not provided with paid holiday can accrue and carry over holiday indefinitely and be paid in lieu upon termination for any untaken holiday over the entire period of engagement, extending back-dated holiday pay claims with significant implications for gig economy workers.
If you engage independent freelancers, contractors or casual workers, review your workforce’s employment and tax status to ensure your workers and employees are classified correctly and receive holiday pay and national minimum wage if they are not self-employed.
2. EU General Data Protection Regulations (“GDPR”)
The GDPR will be implemented on 25 May 2018, introducing a single legal framework across the EEA, implementing further duties on data controllers, increasing financial penalties for any breach, and extending the criteria for valid consent as a lawful basis for processing. It will also prohibit employers from charging a fee for providing information requested in a data subject access request, unless the request is excessive and only covers administrative costs. Businesses in the technology sector needs to be careful about establishing a lawful basis for holding processing the personal data of employees and customers, such as website/app users, given the wide-ranging data some tech companies hold in the course of business.
Think carefully about the current basis on which you lawfully process your employees’ and customers’ personal data. If you currently rely on consent, the individual has to be informed about how their personal data is held and used, and consent has to be a positive opt-in, and not by default. Remember consent can be withdrawn, so prepare to rely on another ground for lawful processing instead to ensure compliance.
3. Gender Pay Gap and Equal Pay
Employers with more than 250 employees are now obliged to annually publish their gender pay gap (if any), with each snapshot date being 5 April every year. This involves reporting on mean and median average pay for make and female employees, and 4 April 2018 is the deadline for the first reports to the published. Reports are publicly available on the gov.uk website.
Equal pay continues to be topic in focus, with over 7,000 employees bringing a collective claim against Asda. The Employment Appeal Tribunal has held that the predominantly female employees who work in the retail stores were entitled to compare themselves to their predominantly male colleagues who work in the distribution centres, extending the basis for claiming equal work (Asda maintains that the discrepancy is down to the different job demands). A further appeal is due to be heard by 31 October 2018 and the appeal decision could have a great impact on UK equal pay law.
If you are obliged to report, ensure you have your figures for 5 April 2017 and you are ready to publish by 4 April 2018. Look at the guidance on “pay” and “bonus” and remember that if there are discrepancies, provide a narrative if possible and explain any proposals to address the issues. An equal pay audit may help to assess any possible liabilities; ensure that men and women are paid equally for jobs of equal value, even if the two jobs may be quite different.