Keep up-to-date this April – 6 key changes in the world of Employment Law 2021
This April 2021- even more so than in other years – will be a busy month for Employment Law. And, business owners. There are a few key changes that will be coming into play next month.
Below are tips for you as an employer, business owner or manager, or employee. It is important you don’t fall behind, or find yourself on the wrong side of these legal changes.
1. 1st April 2021: National Minimum Wage increase
The National Minimum Wage is the minimum hourly pay most workers are entitled to.
Statutory pay rates are reviewed and updated each April. In 2021 the National Living Wage (the minimum wage that usually applies to workers aged 25 and over) will increase by 2.2%, up to £8.91 an hour.
Unusually, this year the National Living Wage has been extended to 23 and 24 year-olds for the first time. This is providing a substantial pay rise of almost 9%.
Some companies can end up paying employees incorrectly, and it is important to pay the right rates. Working with an external payroll department or accountant will help to get it right in light of the changes.
2. 4th April 2021: Other rates of pay are increasing (including maternity and paternity)
New statutory pay rates for 2021/22 change the amount of other types of pay that employees might be entitled to:
3. 6th April 2021: Statutory Sick Pay (SSP)
The SSP rate will be increasing to £96.35 per week. This rate will depend on the number of ‘qualifying days’ the employee works each week. Use the UK Government’s SSP calculator to help you to work out SSP entitlement.
All these statutory pay changes will need to be reflected in your payroll and information regarding benefits you provide as a company to your employees. Here is a summary:
4. Gender pay gap reporting, now extended up until October 2021 (originally been April 2021)
Employers with 250 or more employees are legally entitled to report of the difference in earnings between male and female workers. This allows organisations to understand the extent of the pay disparity. It also gives insight to develop strategies to narrow the gender pay gap.
Most public authority employers were expected to report this gender pay gap information by 30th March 2021. Private and all other public authority employers were expected to do so by 4th April 2021. This has now been extended by 6 months, with reporting for all employers to be provided by 5th October 2021.
The Equality and Human Rights Commission (EHRC) is still encouraging companies to report their gender pay gap information by the April 2021 deadline if possible. The urge behind this relates to the current concern that this delay in reporting could be risking further gender inequalities between workers.
5. 6th April 2021: IR35 ‘off-payroll’ worker changes to apply to the private sector
IR35 tax reform changes will be coming into effect, after being delayed from April 2020 due to the challenges of the coronavirus pandemic. The new IR35 reforms will apply where services are provided via a personal services company, and not where a consultant is providing their services personally as an individual.
If you use ‘off-payroll’ workers it is essential that you not only know about IR35, but also how the changes will impact on your business from 6th April.
From this date, there will be a shift in responsibility for the payment of tax and NI from the contractor to the business hiring them, where the end user or the business hiring the contractor is classed as medium or large under the Inland Revenue rules. This means that business owners will need to be more cautious when hiring contractors and and deciding appropriately upon their status and where appropriate untacking and keeping a note of a status determination statement.
Steps to take now to be ready for IR35 2021
To strengthen your IR35 position, we recommend that you review current contractual and working relationships with your accountants and a professional employment law specialist. Having an in-depth review carried out by a legal expert will help you be better armed to assess employment risks. We can help to assess any contractual relationships where appropriate before IR35 changes come into effect.
6. 30th April 2021: Furlough scheme has now been extended until the end of September
One major change for employers is the extension of the furlough scheme. Chancellor, Rishi Sunak, confirmed in the budget announcement on 3rd March 2021 that the scheme will continue.
Employees will continue to receive 80% of their wages (capped up to £2,500 per month). They may be continuously furloughed or placed on flexi-furlough (allowing them to work part of their normal working hours). This will be with no changes until the end of June 2021.
From July 2021, employers still using the scheme will have to contribute 10% towards the furlough wages. This will then increase to 20% in August and September (with the government topping up the amount to reach the 80% threshold).
Here at HM, we want to help you stay one step ahead.
From furlough extensions and statutory pay rate increases, to tax rules changing – knowing you have support from a friendly Employment Law team can help. Contact us to help you make sense of these obligations, and provide the right legal advice. We can help you adapt to these changes with minimal impact and cost on your business and employees.
Contact our team today: