The world of employment has been spun on its head over the past year or so, with the introduction of furlough schemes and restructuring of redundancies perhaps the main points of discussion. Despite all that is going on, it’s important for employers and employee’s alike to not let this year’s legal employment changes fall under the radar. 

We’ve highlighted a few key changes that have recently come into force, but we’d urge all business owners and HR personnel to ensure they are well aware of all changes so they can be well prepared for any points of action they may need to take now or in the future.

IR35 regulations

On April 6th 2021, the long-awaited IR35 regulations were finally introduced. The rules surrounding IR35 apply to off-payroll working within the private sector and they were put into force in hope of reducing tax avoidance for contractors employed through personal services companies. Any organisations hiring contractors are now fully responsible for establishing their employment status and determining whether the newly introduced IR35 regulations apply. If the IR35 rules do apply, then the organisation is now deemed to be the employer of the contractor and will be liable for all payments related to their tax and national insurance.

Things for your business to do:

If your business hires contractors to conduct work, it’ll be your responsibility to establish their employment status in line with IR35 regulations. Review all contracts to make sure they are compliant.

The National Living Wage

As of April 1st 2021, the National Living Wage increased to £8.91 per hour and became available to 23 and 24 year olds, having previously been restricted to only those workers aged 25 and over. The rates for other bands of National Minimum Wage also saw an increase, with workers aged 21 and 22 now entitled to a minimum of £8.36 per hour, while workers aged 18 to 20 are now entitled to a minimum of £6.56 per hour, and lastly, workers aged 16 and 17 are now entitled to a minimum of £4.62 per hour.

Things for your business to do:

All businesses should have already reviewed the salaries and hourly rate of pay for all employees to ensure that they fall at or above these new National Living Wage minimums. Businesses should pay close attention to the rates of those aged 23 and 24, as they previously wouldn’t have qualified for the National Living Wage but they now do so. If necessary, increase the salaries of relevant employees and inform them of the change to their pay in writing. An update of employment contracts should also be carried out where necessary.

Statutory Redundancy

The maximum weekly limit for redundancy pay increased on April 6th 2021, from £538 to £544, and this is eligible for all employees who have two or more years of service with a company.

Things for your business to do:

Businesses should calculate redundancy payments in line with the newly introduced rates to avoid any costly claims in the Employment Tribunal.

Other changes to Statutory Pay

Alongside an increase in statutory redundancy, there have also been increases in statutory pay for:

• Statutory maternity, paternity, adoption, shared and parental bereavement pay, with each increasing to £151.97 per week.
• Statutory sick pay with an increase to £96.35 per week.

Things for your business to do:

All workers that take leave on the grounds of any of those mentioned above must be paid at the correct new rate. Check handbooks and policies to see if these rates are mentioned as if they are they will need to be amended to reflect the changes.

Gender Pay Gap Reporting

The changes to gender pay gap reporting apply to all companies in the public, private and voluntary sectors with 250 employees or more. Gender pay gap reporting was introduced by the Equality and Human Rights Commission (EHRC) back in 2016 in a bid to improve gender pay equality.

The deadline for gender pay gap reporting is usually April 4th for private and voluntary sector companies and March 30th for public sector companies, but due to the coronavirus pandemic this years deadline has been delayed until October.

Things for your business to do:

Although there is an extension to the deadline, businesses are still encouraged to submit reports at their earliest convenience. If your business publishes their report as soon as possible it may help protect your reputation with current and future employees, customers and competitors.

If you’d like to discuss any aspect of employment law or any of the other legal services that we offer here at Fonseca Law, don’t hesitate to get in touch with our specialist solicitors to find out how we can help you with your case by calling 01495 303124, e-mailing enquiries@fonsecalaw.co.uk or by completing our online contact form.