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Important employment law updates for employers Important employment law updates for employers

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Apr 21

Important employment law updates for employers

Written by Liz Pollock
Associate

DDI: 01423 724608
E: liz.pollock@raworths.co.uk

1 April 2021 – National Living Wage and National Minimum Wage rates increase

From 1 April, the National Living Wage will increase to £8.91 an hour and it will be extended to those aged 23 and 24 for the first time, previously it only applied to those aged 25 and over.  All other National Minimum Wages rates will also increase.  Employers must ensure that staff are paid these statutory minimum amounts.

Age Hourly rate from 1 April 2020 Hourly rate from 1 April 2021
25+ £8.72 £8.91 (extended to those aged 23+)
21-24 £8.20 £8.36 (workers aged 21-22)
18-20 £6.45 £6.56
16-17 £4.55 £4.62
Apprentices* £4.15 £4.30
*Applies to apprentices under 19 or over 19 but in first year of apprenticeship

 

1 April 2021 – Clinically extremely vulnerable and shielding

From 1 April, those individuals categorised as clinically extremely vulnerable (CEV) are no longer advised to shield and they will no longer be eligible for statutory sick pay on this basis.  The CEV are advised to continue to work from home where possible, but if they cannot work from home, they should attend their workplace.

 

4 April 2021 – Statutory payments increase

From 4 April, statutory family-related pay and statutory sick pay will increase.  Again, employers must ensure that staff on such leave are paid these statutory minimum rates.

Type of payment Rate from 4 April 2021 (previous limit) Max period
Statutory maternity pay 90% of normal weekly earnings

£151.97 (£151.20) a week*

6 weeks

33 weeks

Statutory paternity pay £151.97 (£151.20) a week* 2 weeks

 

Statutory adoption pay 90% of normal weekly earnings

£151.97 (£151.20) a week*

6 weeks

33 weeks

Statutory shared parental pay £151.97 (£151.20)*

 

39 weeks
Statutory parental bereavement pay £151.97 (£151.20) a week*

 

2 weeks
*or 90% of normal weekly earnings if lower

 

Type of payment Rate from 4 April 2021 (previous limit) Max period
Statutory sick pay £96.35 (£95.85) a week 28 weeks

 

6 April 2021 – Compensation limits

From 6 April, there will be a new limit on a weeks’ pay, £544, which will affect statutory redundancy pay and unfair dismissal calculations for dismissals that take effect on or after 6 April.

Employee right Maximum awards from 6 April 2021 (previous limit)
Unfair dismissal

Basic award

Compensatory award

 

 

£16,320 (£16,140)

£89,493 (£88,519)

The compensatory award is capped in all unfair dismissal cases except those relating to whistleblowing or health and safety.

Statutory redundancy pay

 

£16,320 (£16,140)

Calculated by reference to age, length of service (subject to a maximum of 20 years) and salary (subject to a statutory cap of £544 (£538) per week)

 

6 April 2021 – Extension of IR35 to the private sector

Off-payroll working rules are designed to ensure individuals who work like employees but through their own limited companies (often known as a personal service company (PSC)), or other intermediary, pay broadly the same income tax and National Insurance contributions as individuals who are directly employed.  These rules are commonly known as IR35 and are aimed at reducing tax avoidance.

From 6 April, the IR35 rules will be extended to large and medium sized companies in the private sector (they already apply to the public sector).  This extension was due to come into come force last April but it was postponed to help businesses during the pandemic.

This means that organisations will be obliged to determine the employment status of the individuals they engage and assess whether or not the IR35 rules apply.  HMRC has an online checking tool, known as CEST, to help with this determination.  https://www.gov.uk/guidance/check-employment-status-for-tax

If the rules do apply, the organisation should provide the individual with a ‘Status Determination Statement’ and treat the payments to PSCs in respect of the individual’s fees as deemed payments of employment income for tax purposes.  This will create significant administrative and compliance burdens for organisations that use PSCs as well as an increase in National Insurance contributions.

 

31 May 2021 – Extension of health and safety detriments to workers

Employees have a right not to be subjected to a detriment by their employers for leaving or refusing to come into work in circumstances where they have a reasonable belief that they, or others, are in serious and imminent danger.  This right is found in section 44 of the Employment Rights Act 1996.  With many employees now used to working from home, and ongoing concerns about Covid-19 infections, employers face the prospect of employees refusing to return to work.

The Government has new Regulations which will extend this right to workers (rather than just employees) in relation to any such detriments taking place on or after 31 May 2021 (once approved by Parliament).  This potentially protects many individuals and enhances their rights in the workplace.

 

1 July, 1 August and 30 September 2021 – The Coronavirus Job Retention Scheme (furlough)

On 1 July the Government’s grant for the furlough scheme reduces and employers must begin to contribute 10% of furlough pay for unworked hours.  From 1 August, employers must contribute 20%.  The furlough scheme will end on 30 September.

 

5 October 2021 – Gender pay gap reporting

Private and voluntary sector employers in England, Wales and Scotland with at least 250 employees are required to publish information about the differences in earnings between men and women in their organisation based on a ‘snapshot’ date of 5 April each year.

However, due to the unprecedented pressures on businesses caused by the pandemic, the Government has announced a suspension of enforcement measures on gender pay gap reporting.  Employers now have until 5 October 2021 to report their 2020/21 figures before enforcement measures are taken.

 

Please contact Liz Pollock in our Employment Unit if you would like to discuss this article.

Published on 6 April 2021

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