Employment law changes from April 2021

Posted 01/04/2021 : By: Kathryn Pratt

Spring is here and it’s time for the April 2021 employment law update. Here we list four changes employers need to ensure their organisation complies with. These changes include an alteration to the national minimum wage age bands, increases to statutory rates and the extension of IR35 reforms to the private sector.

  1. National minimum wage rates
  2. Increase to statutory family friendly pay and statutory sick pay
  3. Redundancy weekly pay maximum amount increase
  4. IR35 extension to private sector 

From 1 April 2021, the rates of the national minimum wage will be as follows:

Aged 23+ (national living wage)

£8.91 per hour

Aged 21-22 (inclusive)                                                       

£8.36 per hour

Aged 18-20 (inclusive)                                                                  

£6.56 per hour

Aged 16-17 (young workers rate: under 18 but 

above compulsory school age who are not apprentices)

£4.62 per hour

Apprentice (under 19 years of age or those aged 19)            

£4.30 per hour

Previously, the national living wage was available only to those aged 25 and over.

The weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97 from 4 April 2021. The weekly rate of statutory sick pay increases to £96.35 from 6 April 2021. If your family friendly policies or sickness absence procedures mention the rates of pay, please be sure to update these figures or feel free to request a review and we will update these for you.

Employees with two years’ service who are made redundant must receive a statutory redundancy payment based on the employee’s weekly pay, length of service and age. The weekly pay cap has increased to £544 from 6 April 2021.

Reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021. Under the new rules, the organisation engaging the contractor is responsible for determining their employment status and assessing whether or not IR35 applies. If IR35 does apply, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes. Once the organisation has determined an individual’s classification, it must provide a status determination statement to the individual and to the party with which the organisation has contracted. For the statement to be valid, the client must also provide reasons for the determination. Employers should review their contracts and put in place the necessary procedures to ensure compliance. 

Please see the following link to the HMRC online tool to determine whether or not contractors fall in or outside of IR35 https://www.gov.uk/guidance/check-employment-status-for-tax or contact us for help to make an assessment. 

Note: IR35 rules apply to private sector companies as well as public sector clients that meet at least two of the following conditions:

•             an annual turnover of more than £10.2 million

•             a balance sheet total of more than £5.1 million

•             employ more than 50 people

If you have any queries on any of the information above, please get in touch with our specialist HR Consultants through this website or by calling 0333 222 0989. 

Our Online HR Portal for businesses is growing!

The online document portal now contains a folder for IR35 documents in addition to 95 plus HR documents, templates and draft letters, covering other topics such as COVID-19, contracts and offer letters, disciplinary issues, flexible working, performance management, family leave, sickness absence, recruitment, termination of employment and redundancy.

All of these materials are regularly updated to comply with new developments such as the COVID-19 crisis and the Good Work Plan, which came into effect on 6 April 2020.

If you would like unlimited one-year access to this portal, we are charging £325 plus VAT.

Please get in touch by emailing employment law solicitor, Claire Sleep at claire.sleep@ashtonslegal.co.uk.

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