HR Hub

Budget 2020 - HR summary

The inevitable focus of the March 2020 Budget are the proposals on sick pay in light of the COVID-19 virus but there are other matters of note for HR.

National Minimum Wage

As well as the already announced increases to the National Living/Minimum Wage, the Low Pay Commission has been asked to make recommendations with the view of reaching a National Living Wage (NLW) of two-thirds of median earnings by 2024, provided economic conditions allow. Following recommendations made by the LPC, the NLW will apply to workers aged 23 and over in April 2021, with a target for it to apply to workers aged 21 and over by 2024.

Neonatal leave and pay

The Budget confirms an intention (announced in a July 2019 consultation) to create an entitlement to neonatal leave and pay for employees whose babies spend an extended period of time in neonatal care, providing up to 12 weeks’ paid leave. There is no date for this but from the Budget’s policy costings, it appears that this won’t be operative until the tax year 2023-24.

Carers’ leave

The Budget confirms an intention to consult on the design of carers’ leave: a new in-work entitlement for employees with unpaid caring responsibilities, such as for a family member or dependents.


To support the employment of veterans, the Budget confirms that there will be a National Insurance (NIC) holiday for employers of veterans in their first year of civilian employment. A full digital service will be available to employers from April 2022; however transitional arrangements will be in place in the 2021-22 tax year which will effectively enable employers of veterans to claim this holiday from April 2021. The holiday will exempt employers from any NIC liability on the veteran’s salary up to the Upper Earnings Limit.

Welfare counselling

The government will, from April 2020, extend the scope of non-taxable counselling services to include related medical treatment, such as cognitive behavioural therapy (CBT), when provided to an employee as part of an employer’s welfare counselling services.