April’s always a busy time of year for any employer or HR professional; not only does it mark the end of one tax year and the start of the next, but it’s also the time of year that important employment law changes kick in.
From the extension of the National Living Wage to increases to statutory family leave pay rates, we’ve rounded up key employment law changes your business needs to look out for this April.
1. IR35 tax changes come into force
The long anticipated changes to the IR35 tax rules are due to come into force on 6 April 2021. This means that some clients will be responsible for deciding whether IR35 applies to their contractor relationships, and if so accounting to HMRC for the applicable tax due on their contractor’s fees.
Find out more about IR35 and what’s changing here.
2. National Living Wage to apply from age 23
The National Living Wage currently applies to staff who are aged 25 and over, with staff under 25 receiving the National Minimum Wage instead. From 1 April 2021, the National Living Wage will now apply to staff who are aged 23 and over.
3. National Minimum Wage and National Living Wage rates increase
On 1 April 2021, the National Minimum Wage and the National Living Wage are increasing as follows:
- Rate for 23+ year olds: £8.91
- Rate for 21-22 year olds: £8.36
- Rate for 18-20 year olds: £6.56
- Rate for 16-17 year olds: £4.62
- Rate for apprentices: £4.30
For guidance about which of your staff must be paid the National Minimum Wage or the National Living Wage, see our Q&A on Staff pay.
4. Statutory maternity, paternity, adoption, shared parental and parental bereavement pay rates increase
These rates are all increasing to £151.97 from 4 April 2021.
5. Increase to statutory sick pay
Statutory sick pay (SSP) is increasing to £96.35 from 6 April 2021.
6. Increase to statutory redundancy pay cap
Whilst the amount of statutory redundancy pay that a business is required to pay depends on the relevant employee’s age, length of serve and pay, redundancy payments are capped by reference to a weekly pay amount. From 6 April 2021, the weekly pay cap is increasing to £544, which means that the maximum amount a business can be required to pay is increasing to £16,320.
If you need guidance about carrying out a redundancy process, see our Q&A.
7. Increase to compensation for unfair dismissal
Compensation in unfair dismissal claims is split into a ‘basic’ award and a ‘compensatory’ award. The compensatory award is designed to compensate an individual for their loss of earnings up to one year’s gross pay, which is subject to a cap.
From 6 April 2021, the cap for the compensatory award is increasing to £89,493.
Further on the horizon…
31 May 2021: Possible extension of protection from detriment in health and safety cases to casual workers
Employees can make a claim in an Employment Tribunal if they are subjected to any detriment (eg not being paid) for not going into work because they reasonably believe that being at work would place them (or someone else) in serious, imminent danger. If approved, new Regulations introduced by the Government will provide the same protection to casual workers from 31 May 2021.
See our Q&A on staff working from home for guidance about what to do if your staff refuse to return to the workplace when it reopens.
30 June 2021: EU Settlement Scheme deadline
If you employ EEA and Swiss nationals who were living in the UK before 1 January 2021, this is their deadline to apply to the EU Settlement Scheme for settled or pre-settled status. See our Q&A for further guidance about how Brexit affects your staff.
1 July 2021: Employers will be expected to start contributing to furloughed workers’ pay for hours not worked
See our guidance on the Coronavirus Job Retention Scheme extension for further information.
30 September 2021: The furlough scheme is due to end
To help you plan ahead, we’ve got a new horizon scanning feature on our blog. Keep checking back to make sure your business keeps on top of important legal developments.