Employment law is always on the move. Here's our summary of the 8 key upcoming changes to be aware of:
The postponed reforms to the IR35 tax rules, which were due to come into force in April 2020, will now take effect from 6 April 2021. These reforms will affect large and medium-sized businesses in the private sector which engage independent contractors through intermediaries such as personal services companies.
Under the new rules, the responsibility for determining a contractor’s employment status will switch to the end user business, and if it determines that IR35 applies, PAYE and NICs will become the responsibility of the fee payer (the entity which contracts directly with the contractor’s intermediary). End-users that ignore the new rules could end up with significant extra tax liabilities and penalties.
Changes to PENP calculations, which are being introduced to avoid unfair outcomes, will come into effect in April and will apply to individuals where their employment is terminated, and their termination payment is received, on or after 6 April 2021.
The changes give an alternative PENP calculation where an employee’s pay period is defined in months, but their contractual notice period or PENP is expressed in weeks. Although employers have had the option of using this alternative calculation since October 2019, this will be required from April 2021.
New rates for statutory redundancy pay and compensation limits for employment tribunal awards will apply where the effective date of termination is on or after 6 April 2021. The increases are (with the previous year's amounts in brackets):
Alongside increases to the National Living Wage and National Minimum Wage (NMW) rates, the Government has accepted the Low Pay Commission’s recommendation to extend the National Living Wage rate (currently only available to workers aged 25 and over) to those aged 23 and over.
The National Living Wage and NMW rates will increase on 1 April 2021 to:
The weekly rates of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay increase to £151.97 from 4 April 2021.
The weekly rate of statutory sick pay will increase to £96.35 from 6 April 2021.
The CRJS was scheduled to end on 30 April 2021. However, in the March Budget, the Chancellor confirmed that the CJRS will be further extended to the end of September 2021.
The existing scheme will continue until 30 June 2021. Until then, the level of grant available to employers under the scheme will stay the same, with employees receiving 80% of their salary for hours not worked. Employers will need to pay employer National Insurance contributions and employer pension contributions.
From 1 July 2021, the level of grant will be reduced. Employers must pay 10% towards the cost of hours not worked, and this will rise to 20% for August and September 2021.
The shielding guidance is changing for individuals who have been classed as clinically extremely vulnerable during the Coronavirus pandemic. On 5 January 2021, these individuals were advised to shield, however, with infection rates and cases falling, shielding will not be advised for the clinically extremely vulnerable from 1 April 2021.
As a result, these workers will no longer be eligible for statutory sick pay or Employment and Support Allowance on the basis of being advised to shield.
Where possible, working from home is advised for the clinically extremely vulnerable and, where this is not possible, employers must take precautions to reduce the risk of transmission in the workplace. These workers may still be eligible for the furlough scheme.
Public sector bodies and private sector employers with at least 250 employees are required to submit gender pay gap reports annually, by 30 March and 4 April respectively.
In light of the continuing effects of the pandemic, the Equality and Human Rights Commission has confirmed that employers have until 5 October 2021 to report their gender pay gap information for 2020/21 (which uses a snapshot date of 31 March 2020 or 6 April 2020).
That said, employers are encouraged to report before October 2021 where possible.
The Government has published changes to the immigration rules relating to the Sponsored Skilled Workers route, many of which are due to take effect from 6 April 2021. The Sponsored Skilled Workers route is for applicants who have a confirmed job offer from an approved employer sponsor.
The changes introduce a new minimum hourly rate of pay of £10.10. Employer sponsors must calculate the hourly rate of pay for their sponsored employees, even if the annual minimum salary requirement of £25,800 is met.
The changes also include new additions to the shortage occupation list.
It has been confirmed that the Home Office fees for immigration will not now be updated on 6 April 2021.