With Easter just around the corner that must mean one thing... employment law changes!
There are some changes in the following areas NMW, Living Wage and Statutory payments, IR35, Brexit, Furlough and shielding arrangements which you should be aware of. Read my practical round up of what’s changing and how this may impact your business.
Changes to employment law typically take place in April and October each year, here is a round up of the changes scheduled to take place in April 2021 and a couple of items which are on the horizon.
Statutory Payments, National Minimum Wage and National Living Wage rate changes
Some key changes you need to be aware of:
Rates from 01 April 2021
These rates are for the National Living Wage (for those aged 23 and over previously only the over 25's) and the National Minimum Wage (for those of at least school leaving age) from 1 April 2021.
23 and over = £8.91
21 to 22 = £8.36
18 to 20 = £6.56
Under 18 = £4.62
Apprentice = £4.30
To see the previous rates and how they compare visit Gov.uk
Statutory payment increases
Statutory Sick Pay (SSP) increased to £96.35 from 06 April 2021.
Statutory maternity (SMP), paternity (SPP), adoption (SAP), shared parental (ShPP) and parental bereavement (SPBP) pay increases to £151.97 per week from 04 April 2021.
The statutory redundancy pay weekly cap will increase from £538 to £544 per week from 06 April 2021.
IR35
Otherwise known as off-payroll working rules change on 06 April 2021 and are applied differently, this was due to come into effect on 06 April 2020 but was postponed for one year due to the pandemic.
From 06 April 2021, all public authorities and medium and large-sized companies will be responsible for deciding the employment status of workers (sometimes known as contractors). Medium and large private-sector employers will be required to determine the IR35 status of their contractors, and to provide a status determination statement explaining the reason for the decision.
Who the rules apply to?
The rules apply to all public sector clients and private sector companies that meet 2 or more of the following conditions:
you have an annual turnover of more than £10.2 million,
you have a balance sheet total of more than £5.1 million,
you have more than 50 employees.
Balance sheet total means the total amounts shown as assets in the company’s balance sheet before deducting any liabilities.
Recommended actions for businesses:
Review your use of contractors – establish if they are in scope of the IR35 rules. The HMRC’s Check Employment Status for Tax (CEST) online tool will be helpful in doing this.
Complete a Status Assessment and make a Status Determination Statement (SDS) – an assessment must be made as to the contractors’ employment status i.e. employed or self-employed. The SDS must be provided to the contractor along with a route of dispute resolution where a response to any dispute must be issued within 45 days.
A note about small businesses
If a worker provides services to a small client in the private sector, the worker’s intermediary will remain responsible for deciding the worker’s employment status and if the rules apply.
Click for detailed information on IR35 including links to the SDS requirements and CEST tool Gov.uk.
Coronavirus Job Retention Scheme
As I am sure you will have seen already the Chancellor has extended the scheme until 30 September 2021, however employers will be expected to cover some of the costs on a scaled basis beginning July 2021. Plus there remains the ability to have flexible furloughing of employees.
Shielding ends 31 March 2021
As part of the Government's roadmap out of restrictions, shielding will end on 31 March 2021. Those who are clinically extremely vulnerable ('CEV') were accordingly put onto furlough or statutory sick pay where they were unable to work from home, in order to protect their health.
For employers this means if you have CEV employees on furlough or sick leave, they will start to receive letters with new Public Health England guidance formally confirming:
That they do not need to shield from 1 April 2021.
In terms of work, they will be told to continue to work from home where that is possible or, where that is not possible, to attend the workplace.
That SSP will no longer be provided on the basis of being CEV, but that they may continue to be eligible for furlough.
Where employers have CEV employees who cannot easily work from home must start thinking about how they welcome CEV employees back into the workplace and plan that process to allay fears and maintain safety through the continued implementation of covid-secure measures in the workplace.
Training and Development
Remember employees on furlough can be actively involved with training as long as they receive the National Minimum Wage for any time spent training. This could support those CEV employees with either skills, procedural or re-induction training to support their smooth return to work.
Brexit
Couple of important milestones to make you aware of:
Settled Status – EU nationals working in the UK wishing to remain in the UK must apply for settled status before 30 June 2021.
Free movement – In case you missed it, a points based immigration system was implemented effective 01 January 2021 effecting the free movement for UK nationals travelling to the EEA and EU nationals travelling to the UK.
Don’t forget…
If your business employs over 250 employees you are required to publish your Gender Pay Gap Report by 04 April 2021.
A note on Vaccinations: The advice from Auxilium HR Solutions is to positively encourage the take up for vaccinations where there is no medical reason for not. However, if you are wanting to put anything compulsory into contracts, please contact us for some advice first.
Upcoming changes: The Government are also proposing some further changes including:
Neonatal leave and pay,
Carers leave, and
Pregnancy protection from redundancy.
Further details to follow later in the year once more information is published.
Auxilium HR Solutions are here to help! If you have any question on any of the above or any other HR, Recruitment or Training matter get in touch hello@auxiliumhr.co.uk or use our contact us page.
DISCLAIMER: The materials in this guidance are provided for general information purposes and do not constitute legal or other professional advice. While the information is considered to be true and correct at the date of publication, changes in circumstances may impact the accuracy and validity of the information. Auxilium HR Solutions is not responsible for any errors or omissions, or for any action or decision taken as a result of using the guidance. You should consult a professional adviser for legal or other advice where appropriate.