Six new employment laws (and what they mean for you)

Kate Palmer - HR Advice and Consultancy Director

January 26 2021

Keeping up with employment laws is no small task.

With so much to consider – and not enough time in the day – it’s understandable if you haven’t read up on the new legislation yet.

To help you out, we’ve rounded up all the important changes you can expect in 2021.

1. New immigration rules

As 2020 came to an end, so did freedom of movement in the EU.

That means if you want to hire anyone outside the UK or Ireland, they’ll need to apply for permission in advance. And you’ll also need a sponsor licence to welcome any staff from overseas – not just workers from outside the EU.

Before you apply for your licence, make sure candidates meet the requirements in the new points-based system. As part of the Skilled Worker route, staff from abroad will need to have 70 points to join your team.

The three essential requirements add up to 50 points:

  • They should have a job offer from a licenced sponsor (that’s you)
  • The job is at an appropriate skill level (A Level and equivalent)
  • They speak English at the required level

To make up the extra 20 points, you need to tick off at least one of the following:

  • You’re offering a salary of £23,040 - £25,599 or at least 90% of the going rate for the role (whichever is highest) – 10 points
  • You’re offering a salary of £25,600 + or at least the going rate for the role (whichever is highest) – 20 points
  • There’s currently a shortage of workers in your industry – 20 points
  • The job requires a PhD in a subject relevant to your industry – 10 points
  • The job requires a PhD in a STEM subject relevant to your industry – 20 points

2. The end of the furlough scheme

The furlough scheme is currently set to end on 30 April.

As the deadline approaches, it’s important to think about your next steps. Can you afford to keep your staff without the scheme? And if not, are there any alternatives to redundancies?

Other options could include:

  • Flexible working
  • Early retirement or voluntary redundancies
  • Reducing working hours
  • Temporary layoffs

3. New rules for contractors

Do you deal with contractors? And do you work for a medium-to-large sized company? If so, look out for changes in April – in the form of an IR35 update.

While COVID-19 delayed changes to IR35 last year, there’s nothing to suggest they won’t go ahead this spring.

In plain English, IR35 rules cover any workers who aren’t on your payroll. As self-employed contractors enjoy tax benefits, IR35 rules crack down on anyone taking advantage of this.

Currently, contracted workers are responsible for declaring their own self-employed status to HMRC. But after the update in spring, this will be down to you.

So, what does this mean for your business? If HMRC disagrees with the employment status of your staff, you’ll face the penalties – instead of your contracted employees.

If you own a small business, you don’t need to worry about this update. The new update only applies if you have two or more of the following:

  • A turnover of more the £10.2 million
  • 50 or more employees
  • A balance sheet of over £5.1 million

4. Changes to modern slavery statements

Keep an eye out for any updates to modern slavery statements.

Last July, the government set out tougher plans to clamp down on modern slavery. As they want more companies to produce statements, you might need to publish one if you don’t already.  

Plus, public sector companies – not just private – will have to create a statement if they turn over £36 million.

The way you structure your statement will also change, as the government created new guidelines. It’s been proposed that a modern slavery statement will need to cover six points:

  • Your business’s structure and supply chains
  • Your slavery and human trafficking policies
  • How your business puts the policies into practice
  • The parts of your business where there’s a risk of slavery and human trafficking – and the steps you’ve taken to prevent this
  • How you measure the effectiveness of your policies
  • How you educate your staff about slavery and human trafficking

On top of this, you’ll soon need to upload your statement onto a new government-run reporting tool. This means customers can compare anti-slavery policies online and make more informed decisions.

These updates are set to launch this year – so make sure you’re on the lookout for upcoming changes.

5. Extra redundancy protection for pregnant employees

Are you considering redundancies? Before you dismiss anyone, you need to consider if you can keep staff on by offering them alternative roles. Staff on maternity leave should be first in line for these opportunities.  

And that’s always been the case.

However, new rules will change how long this protection lasts. The employee will be protected as soon as they announce their pregnancy – right up until 6 months after they return from maternity leave.

It’s not yet clear when this will take effect, but it’s something you can expect later this year.

6. Wage changes

Get ready for changes to the minimum and National Living Wage this year.

From 1 April, you’ll see wage increases across every age group. And not only that, but the National Living Wage will expand to include all workers aged 23 and above.

Here’s how the new hourly rates look:

National Living Wage £8.72 to £8.91 (2.2% increase)
Age 21-22 £8.20 to £8.36 (2.0% increase)
Age 18-20 £6.45 to £6.56 (1.7% increase)
Age 16-17 £4.55 to £4.62 (1.5% increase)
Apprentice rate £4.15 to £4.30 (3.6% increase)

No matter how big or small your company is, these increases apply to everyone.You can also expect statutory pay changes, too – so make sure these dates are in your diary:

  • From 4 April, parental pay will increase from £151.20 to £151.97 per week. This includes maternity, paternity, adoption, and shared parental and parental bereavement pay.
  • From 6 April, Statutory Sick Pay will jump from £95.85 to £96.35 per week.

Struggling with endless employment laws?

If you’re trying to wrap your head around endless employment laws, we’re here to help.

As a business owner, you shouldn’t have to worry about all the nitty gritty legal changes. We’ll make sure your business stays up to speed with all the latest laws – so you don’t have to.

Peninsula clients receive 24/7 support and advice whenever they need it. If you’re not a client and you’d like help with employment law, fill out our enquiry form to get started.

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