After a challenging year for both employers and employees, and while COVID-19 continues to dominate, we are looking forward to what’s on the horizon for employment law in 2021.
| BREXIT and immigration
The arrival of Brexit now means we have a new points-based immigration system, which will apply to most EEA nationals from 1 January 2021. EEA nationals arriving in the UK from that date will need to comply with the same visa requirements as other non-UK nationals. Are your recruitment practices ready, do you need to consider applying for or amending your Sponsors licence? |
IR35
The off-payroll working rules, which sit over and above the existing IR35 regime, are being extended to the private sector and are due to come into force from 6 April 2021.
The purpose of the off-payroll working rules and IR35 regime is to ensure individuals who work in a similar way to employees, e.g. contractors, consultants and freelancers, pay broadly the same income tax and national insurance contributions as employees.
The off-payroll working rules apply to individuals who provide their services personally through an intermediary (e.g. their own personal services company) to medium or large clients in the private sector. The new rules require the client to assess the employment status of individuals who provide their labour through their own intermediary. Are they a disguised employee?
The rules allocate responsibility to the fee payer (the organisation who pays the intermediary) for making deductions for income tax, NICs and apprenticeship levy on fees paid for services.
| Return of gender pay gap reporting
The one-off reprieve applied to gender pay gaps relating to data from 5 April 2019. The regime is now revived and by 4 April 2021 employers must report their gender pay gaps calculated using snap shot data from 2020. Organisations employing 250 or more employees at the relevant snapshot date, being 30 March 2020 for public sector employers and 5 April 2020 for private sector employers, will need to publish their report including any furloughed employees.
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National Minimum Wage (NMW) and National Living Wage (NLW)
The Low Pay Commission’s recommended increases to the national living wage (NLW) and national minimum wage (NMW) rates have been accepted and are to apply from 1 April 2021.
The new rates will be:
- Age 23 or over (NLW rate): £8.91.
- Age 21 to 22: £8.36.
- Age 18 to 20: £6.56.
- Age 16 to 17: £4.62.
- Apprentice rate: £4.30.
| Statutory rates of pay 2021
Proposed increases to several statutory benefit payments have been published by the DWP:
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Employment Bill – what is on the agenda?
A new Employment Bill was announced in the Queen’s speech in December 2019 and is expected to be published in 2021. The bill is likely to address a broad range of measures, including recommendations from the Government’s 2018 Good Work Plan including:
- Flexible working the default position unless employers have a good reason to refuse. Consultation is expected, although the Bill is likely to include provision for new rights;
- introducing neonatal leave and pay a new right to 12 weeks’ paid leave for parents whose babies spend time in neonatal care units;
- Carers leave a new right for working carers to take up to five extra days’ leave per year to help them to carry out their caring responsibilities;
- extending redundancy protection to pregnant employees and maternity returners to cover the period from when employees notify their employer of their pregnancy (whether orally or in writing) until six months after the end of their maternity leave. Similar protections will apply to parents returning from adoption or shared parental leave;
- introducing a new right for all workers with variable hours to request a more stable and predictable contract after 26 weeks’ service aimed at those engaged under contracts with variable and unpredictable hours, such as zero-hours employees; and
- creating a single body with responsibility for state enforcement of employment law for more vulnerable workers. It would also take over minimum wage enforcement from HMRC and have a new role in enforcing holiday pay for vulnerable workers plus matters such as gangmaster licensing.
| Ongoing consultations
BEIS has recently opened two consultations which will generate interest in the coming year. These propose: · measures to extend the ban on exclusivity clauses in employment contracts to cover those earning under the Lower Earnings Limit, currently £120 a week.
· measures to reform post-termination restrictions/restrictive covenants in employment contracts. The consultation seeks views on proposals to require employers to continue paying compensation to employees for the duration of the restriction, requiring employers to confirm in writing to employees the exact terms of a non-compete clause before their employment commences, introducing a statutory limit on the length of non-compete clauses, or banning the use of non-compete clauses altogether.
Both consultations close on 26 February 2021.
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And finally …
You may have missed during the tumult of 2020, a range of non-COVID employment law developments. These include:
- employers became obliged to provide a more detailed written statement of employment particulars to all staff (including workers) by day one of employment;
- employers became liable to pay employers’ national insurance contributions at 13.8% on termination payments exceeding £30,000;
- working parents gained a specific entitlement to two weeks’ paid bereavement leave in the event of losing a child under the age of 18;
- the reference period for calculating statutory holiday pay increased from 12 weeks to 52 weeks; and
- the threshold for demanding information and consultation arrangements was reduced from 10% to 2% of employees.
In this environment, it is vital to keep an eye on proposed and planned changes during an unpredictable 2021.
Please drop us an e mail or call if you need any further details or assistance and stay safe and well.
Lucy and Roger
