It is that time of year again when a new raft of employment law updates and changes come into force. With employers continuing to monitor and keep up to date with the latest coronavirus restrictions and rules in the workplace, it is important to ensure you are also up to date with the employment law changes that came into force in April.
Katie Bowen Nicholas, Employment Solicitor at Hegarty Solicitors discusses five key employment law changes that employers and HR professionals should be aware of.
National minimum wage increases
Anyone who is employed as an employee or worker must get the National Minimum Wage or National Living Wage. The hourly rate for the minimum wage depends on an employee’s age and whether they’re an apprentice.
The National Living Wage was previously for those aged over 25, but from 1 April 2021, it also applies to those aged 23 and 24. The National Minimum Wage applies to those of at least school leaving age. From 1 April 2021 the rates are as follows: £8.91 – for those 23 and over; £8.36 – 21 to 22; £6.56 – 18 to 20; £4.62 – Under 18 and £4.30 – Apprentice.
New limits on statutory redundancy pay
From 6 April 2021, statutory redundancy payments, based on the employee’s weekly pay, length of service and age, are subject to a maximum weekly amount of £544. Consequently, this increase means statutory redundancy pay will increase to a maximum payment of £16,320. All employees made redundant who have completed at least two years’ continuous service are entitled to a statutory redundancy payment.
Employers should also be aware that under new legislation introduced in 2020, for employees who have normal working hours that do not vary, employers must treat any weeks an employee spent on furlough over the 12-week reference period for calculating redundancy payments as if they were working, and on full (100%) pay.
Reforms to IR35 rules on off-payroll working in the private sector
Employers in the private sector should review their contracts for IR35 and put in place the necessary procedures to ensure compliance. Under new rules introduced on 6th April, the organisation engaging the contractor is responsible for determining their employment status, assessing whether IR35 applies and providing a status determination statement. If IR35 applies, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.
The new rules aim to reduce tax avoidance for contractors employed via personal service companies.
Statutory family-related pay and statutory sick pay increases
From 4th April 2021 the weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increased to £151.97 and from 6th April 2021 the weekly rate of statutory sick pay increased to £96.35.
Employers and HR managers should ensure policies and documents that detail the rates, such as sickness absence and maternity policies, are updated.
Gender pay gap reporting
Employers that have 250 or more employees are required to follow the gender pay gap regulations by publishing their gender pay gap data every year.
The gender pay gap reporting deadlines were originally 30th March 2021 for public sector organisations and 4th April 2021 for the private, voluntary, and all other public authority employers. However, The Equality and Human Rights Commission (EHRC) recently extended the deadline for employers to report their gender pay gap information due to the impacts of the Covid-19 pandemic. All employers will now have until 5th October 2021 to publish their gender pay gap figures.Read more about gender pay gap reporting