In April and October of each year, the Government usually issues changes in employment legislation however, there are also minor tweaks to employment law throughout the year, whether by statute or through case law. April 2021 is no different although in a year where the “f-word” is now more commonly associated with the word furlough, here are some changes taking place in 2021:
The government’s furlough scheme is currently due to end on 30 September 2021. Employers should make plans for any redundancies or alternative options in advance of the scheme ending if they are relying on the government funds to retain employment.
National Living Wage/Minimum Wage
The national living wage increased from £8.72 an hour to £8.91 an hour and from 1st April 2021, applies to anyone over the age of 23 years (previously 25 years).
The minimum wage for those under 23 increased as follows:
21-22 year olds: increased from £8.20 to £8.46 per hour
18-20 year olds: increased from £6.45 to £6.56 per hour
Under 18s: increased from £4.55 to £4.62 per hour
Apprentices: increased from £4.15 to £4.30 per hour
The PC Payroll & Legal salary calculator can help you work out what you need to pay your employees.
As a result of Brexit from 1 January 2021, there is now a points-based immigration system for hiring anyone from outside the UK. This means that an employer wishing to hire most workers and employees from outside the UK will need a sponsor licence and anyone recruited from outside the UK will need to meet certain requirements. Only skilled workers will be granted a visa, meaning there will be no route of access for lower skilled workers.
EU workers have until 30th June 2021 to apply for settled status which will allow them to remain in the UK subject to certain eligibility which includes that they must have been resident in the UK on 1st December 2020.
Whilst the off-payroll working rules (IR35) do not affect employment law itself in terms of the rights of employees and workers, it does have huge employment tax implications which see a change in responsibility for assessing whether IR35 applies from the personal services company (or intermediary) to the end-user. As of 6th April 2021, private medium and large businesses engaging contractors using intermediary companies will be responsible for assessing the employment status of those contractors. If IR35 applies, responsibility for operating PAYE and NICs on the fees paid to the contractors intermediary will rest with the fee payer as they are deemed to have the contractual relationship with the contractors intermediary.
Small business exemptions apply to end users who meet two or more or the following criteria:
- Annual turnover is no more than £10.2 milltion
- Balance sheet total is no more than £5.1 million
- There are no more than 50 employees
All organisations in the public sector remain legally obliged to comply with IR35.
PC Payroll & Legal have launched a new IR35 review service for advice and opinion on whether your business and your your relationship with your contractors falls within IR35. Ask the team for details on how we can help.
New limits on employment statutory redundancy pay
Employees with over two years’ service and dismissed for redundancy must be paid at least a statutory redundancy payment (in addition to any notice requirements and outstanding leave) . The statutory redundancy payment is an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount which is £544 from 6 April 2021.
Increase of statutory sick pay and other statutory family leave pay
The weekly rate of statutory sick pay increases to £96.35 from 6 April 2021.
The weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97 from 4 April 2021.
This is a short summary of the changes that have been announced and you should be aware of. If you would like some help drafting your employment contract for your nanny or small business, please give PC Payroll & Legal a call and we would be pleased to assist, with an onsite solicitor as part of the team, ready to help.