Employment changes 2021

Here are some Employment Law changes we can expect to see in 2021:

 

 

On 4 December 2020, the Government began consultation into two specific areas of employment law, both of which are due to end on 26 February 2021. The first relates to the use of non-exclusivity clauses in employment contracts for employees who earn less than the Lower Earnings Limit, currently (£120 per week). The aim is that low-income workers can be employed by other employers without breaching their employment contracts. The second relates to the measures needed to reform post-termination non-compete clauses in employment contracts. The consultation seeks views on the following:

• to require employers to continue paying the compensation to employees for the duration of a post-termination non-compete clause, 

• 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 them altogether.

 

National Living Wage 

 

The Government has fully accepted the Low Pay Commission’s recommendations and has announced that the revised National Living Wage (NLW) and National Minimum Wage (NMW) rates will come into force from April 2021. 

 

The new rates will be:

• Age 23 or over (NLW rate): £8.91 (up 2.2% from £8.72).

• Age 21 to 22: £8.36 (up 2% from £8.20).

• Age 18 to 20: £6.56 (up 1.7% from £6.45).

• Age 16 to 17: £4.62 (up 1.5% from £4.55).

• Apprentice rate: £4.30 (up 3.6% from £4.15).

 

 

The changes to the off-payroll rules were due to come into effect on 6 April 2020 however this was delayed until April 2021 to allow businesses and individuals to deal with the economic impact of COVID-19 pandemic.

 

The off-payroll working rules, sometimes known as IR35, can apply if a worker provides their services through their own limited company or another type of intermediary to the client. An intermediary will usually be the worker’s own personal service company or partnership. The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees. The client is the organisation who is or will be receiving the services of the worker and therefore it will be the client’s responsibility to determine if off-payroll working rules apply.

The rules will come into force on 6 April 2021.

 

 

An employee who is at risk of redundancy whist on maternity leave has the right to be offered suitable alternative employment that is available.  On 25 January 2019, the BEIS published a consultation on extending this protection. The government is proposing to introduce legislation that will afford employees the same protection from the date they notify their employer in writing of their pregnancy, to six months after their return from maternity leave. The proposals also seek to extend to similar types of leave such as adoption leave and shared parental leave. The government has said that legislation will be put in place when Parliamentary time allows.

 

 

The Government has announced that the Coronavirus Job Retention Scheme has been extended until 30 April 2021. The scheme allows employers to claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. Employers can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked. Employers are required to pay for employer National Insurance contributions and pension costs. The latest government guidance can be found here: 

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme