From the 5th of December 2022 the government has announced a ban on Exclusivity Clauses in contracts for workers on or below the Lower Earnings Limit (the threshold that entitles employees to qualify for certain state benefits such as the basic state pension). The lower earnings limit for the current tax year is set at £123 a week and an estimated 1.5 million workers have weekly earnings at or below this level.
Exclusivity clauses in employment contracts prevent workers from working for other employers. The ban on them in zero hours contracts was introduced in 2015, when the aim was the same to maximise opportunities for individuals to find additional work and apply their skills to drive economic recovery.
What does this mean for you as an employer?
Firstly, you need to work out who this applies to by working out the average weekly earnings of all employees. You will need to review your contracts, for employees earning under the lower earnings limit and remove the exclusivity clause.
There are positives to this new change, not only does it support low earning workers increase their income, it also supports businesses by widening the talent pool of applicants to those who may have previously been prevented from applying for roles due to an exclusivity clause with another employer.
If you have workers earning under the lower earnings limit, please give us a call today and we will support you through these changes.
📢If you need any advice on how to make your business more diverse and inclusive or need HR or Training services, contact us for a free initial consultation call on: 01935 411191 or email: enquiries@rbhr.co.uk. 📢