Employment law and other important changes

The following is a summary of the key updates regarding employment law changes from April 2021. It also includes changes that came into effect since 6 April 2020. (Source: XpertHR)

Since April 2020

April 2021

Employees on furlough scheme extension entitled to statutory payments based on normal pay (31 March 2021)

The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) (Amendment) Regulations 2021(SI 2021/177) provide that when calculating normal weekly earnings for certain statutory payments, such as redundancy, a week’s pay is based on an employee’s normal pay rather than furlough pay during the period of furlough. The Coronavirus Job Retention Scheme, under which an employee can be furloughed, was due to end on 31 March 2021 but has been extended until 30 April 2021.

National minimum wage rises take effect (1 April 2021)

The draft National Minimum Wage (Amendment) Regulations 2021 provide that the rate of the national living wage increases from £8.72 to £8.91. The main (adult) rate of the national minimum wage rises from £8.20 to £8.36 per hour. The rate for workers aged at least 18 but under 21 increases from £6.45 to £6.56 per hour. The rate for workers aged 16–17 rises from £4.55 to £4.62 per hour and the apprentice rate rises from £4.15 to £4.30 per hour. The accommodation offset increases from £8.20 to £8.36 per day.

Statutory maternity pay and other family-related statutory pay rates increase (4 April 2021)

The Social Security Benefits Up-rating Order 2021 (SI 2021/162) provides that the rate of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay increase from £151.20 to £151.97 per week.

Reform to intermediaries legislation (IR35) is extended to the private sector (6 April 2021)

The rules on off-payroll working in the private sector are amended, with the April 2017 changes to intermediaries legislation (IR35) in the public sector being extended to the private sector. The organisation, agency or other third party are made responsible for operating IR35, as opposed to the individual being engaged. However, small organisations are exempt.

Lower earnings limit for national insurance contributions frozen (6 April 2021)

The Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021 (SI 2021/157) provide that the lower earnings limit for primary Class 1 national insurance contributions is frozen at £120 per week.

Employment tribunal award limits increase (6 April 2021)

The Employment Rights (Increase of Limits) Order 2021 (SI 2021/208) increases the limits applying to various tribunal awards and other amounts payable under employment legislation, including the maximum amount of a week’s pay for the purpose of calculating a redundancy payment and the basic and additional award of compensation for unfair dismissal (which increases to £544). The limit on the amount of a guarantee payment is frozen at £30 per day. The order applies where the event that gives rise to the entitlement to the payment occurs on or after 6 April 2021.

HMRC has been given the power to recover tax from parties other than an employer in off-payroll working arrangements (6 April 2021)

The Income Tax (Pay As You Earn) (Amendment No.3) Regulations 2020 (SI 2020/1150) provide that where an employer has not deducted income tax under PAYE from payments made to an off-payroll worker, and there is no realistic prospect of recovering the tax from the employer within a reasonable time frame, HM Revenue and Customs (HMRC) can recover the tax from other parties within the labour supply chain, namely the agency with which the client contracts or the client for whom the work has been undertaken.

State pension rates increase (6 April 2021)

The Social Security Benefits Up-rating Order 2021 (SI 2021/162) provides that the rate of the single-tier and basic rate state pensions increase from £175.20 to £179.60 per week and from £134.25 to £137.60 per week respectively.

Statutory sick pay rises (6 April 2021)

The Social Security Benefits Up-rating Order 2021 (SI 2021/162) provides that the rate of statutory sick pay increases from £95.85 to £96.35 per week.

Protection from detriment in health and safety cases extends to workers (31 May 2021)

The draft Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021 extends the protection against detrimental treatment to workers who, in circumstances of danger that they reasonably believed to be serious and imminent, leave or refuse to return to the workplace or take steps to protect themselves or other persons.