After a very turbulent year for many organisations and amidst the minefield of employment law, employers must be aware of forthcoming legislative developments for 2021. HR Team has compiled a dated list so as that our clients and UK/NI employers can anticipate some of the confirmed and proposed developments in employment law that businesses need to be aware of.
The employment law changes are as follows:
1. January 1 – New Immigration Law in Force
On this date, arrangements under the new immigration system from Brexit take effect and apply equally to EU and non-EU citizens.
The changes to the former points-based system include:
- Replacements of the tier 2 general category with a skilled worker route (requires a job offer in an eligible skilled occupation from an approved sponsoring employer)
- Abolition of maximum six-year stay for workers in this category
- Gross basic salary must be £26,600 or over
- Skill level must be equivalent to A-levels
- Applicants must have an intermediate-level ability to speak English
2. March 31 – Coronavirus Job Retention Scheme
While the Coronavirus Job Retention Scheme (CJRS) was proposed to end on October 31. it has now been extended until March 31, 2021. The CJRS will continue for all UK nations, meaning that the Job Support Scheme (JSS), which was meant to begin on November 1, will be postponed.
The government has reverted to the original structure of the CJRS, with some slight differences, these are:
- Employers will be able to place their staff on furlough and claim 80% of their salary up to a cap of £2,500 per month per employee
- The difference is that employers will be asked to contribute National Insurance and Pensions contributions whilst they claim under the CJRS
- Flexible furlough also being extended so employees can work some hours and have their unworked hours covered by the grant
3. April 1 – National Living Wage and National Minimum Wage Increase
The National Living Wage (NLW) rises to £8.91 on this date. The age at which workers become entitled to the NLW also drops by two years to 23.
The breakdown of rates is as follows:
- Workers aged 23 and over: £8.91 an hour (National Living Wage)
- Workers aged 21-22: £8.36 an hour
- Development rate for workers aged 18-20: £6.56 an hour
- Young workers rate for workers aged 16-17: £4.62 an hour
- Apprentice rate: £4.30 an hour
4. April 6 – Extension of IR35 To The Private Sector
The IR35 rules prevent contractors working through Personal Service Companies (PCS), and performing similar roles to employees, paying less tax and NICs than if they were permanently employed by the client organisation.
Previously, contractors assessed whether IR35 applied to them. In April 2017, responsibility for deciding whether contractors’ working in the public sector were caught by IR35 switched to their employers, and those organisations also became liable for deducting the right amount of tax and NICs from fees paid to the contractors’ PSCs.
From April 6 onwards, this responsibility applies to all private sector employers that in a tax year have:
- More than 50 employees
- An annual turnover over £10.2 million
- A balance sheet worth over £5.1 million.
5. Date To Be Confirmed – Carers Leave (Employment Bill)
The government issued a consultation in March 2020 on proposals to introduce a new right for employees with caring responsibilities to take a week’s unpaid leave per year.
The consultation sought views on who should be eligible for the leave, the purpose of the leave and applicable notification requirements.
The consultation closed in August 2020 and the government’s response is not yet available. There is no confirmed timescale for the new right to be introduced, but it is likely to be included in the government’s anticipated Employment Bill.
6. Date To Be Confirmed – Extending Pregnancy Protection From Redundancy (Employment Bill)
An employee at risk of redundancy while on maternity, adoption, or shared parental leave has the right to be offered any suitable alternative vacancy that is available.
The government is proposing to extend this protection to:
- Pregnant employees, once they have told their employer of their pregnancy
- Employees returning from maternity or adoption leave within the previous six months
- Parents returning from shared parental leave
The government has said that legislation will be brought forward when Parliamentary time allows.
7. Date To Be Confirmed – Employment Bill
A new Employment Bill was announced in the December 2019 Queen’s Speech, which is expected to be published in 2021.
The Employment Bill is likely to include the following measures:
- The introduction of a single labour market enforcement body to ensure that vulnerable workers are better informed of their rights, and to support businesses in compliance.
- Payment of all tips and service charges go to workers, with the distribution of these sums supported by a statutory Code of Practice.
- A new right to request a more predictable and stable contract after 26 weeks’ service, aimed at those engaged under contracts with variable and unpredictable hours, such as zero-hours employees.