Partner Sue Dowling, head of our Employment Law team, summarises changes coming into effect from April 2021 that will affect both employers and employees.
IR35
As we have outlined in our recent blog article, ‘IR35 - Are You Ready for the Changes on 6 April 2021?’, planned reforms involving the IR35 tax regime, affecting ‘medium and large’ private sector (end-user) clients, contractors and intermediaries, will take effect from 6 April 2021.
Under the reforms, liability for determining a contractors’ status as an employee or contractor (therefore ensuring that tax is being paid at the appropriate level) will pass from the contractor to the employer.
Employment Tribunals
Compensation rates are set to change from 6 April 2021, increasing the maximum weekly pay in a redundancy situation to £544 (from £538). Statutory Guarantee Pay (SGP) will remain at £30.
The move will see maximum statutory redundancy pay fall in line with unfair dismissal basic award pay at £16,320.
Where a worker (claimant) is judged to have been unfairly dismissed (other than automatic unfair dismissal cases), they are entitled to a maximum of 52 weeks’ pay, subject to an overall cap. That capped allowance rises to £89,493. In a situation where the employer has failed to adhere instructions from the Employment Tribunal, an additional award of up to £28,288 may be made, based on average weekly earnings.
Statutory sick pay
All eligible employees are entitled to receive Statutory Sick Pay (SSP). From 6 April 2021, the rate will increase to £96.35 per week (from £95.85). For eligibility purposes, the lower earnings limit will remain unchanged at £120 per week.
Family leave
For statutory family leave, which encompasses Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP) and Shared Parental Pay (ShPP), the weekly rates will increase to £151.97 per week (from £151.20) on 4 April 2021.
National Minimum Wage and National Living Wage
From 1 April 2021, the National Living Wage is extended to those 23 and over (from those aged 25 and over). In addition the new hourly rates will be as follows:
|
Rate from April 2020 |
Rate from April 2021 |
Increase |
|
|
|
|
|
|
|
National Living Wage (NLW) |
£8.20 - £8.72 |
£8.91 |
2.2% - 8.65% |
|
21-22 year old rate (NMW) |
£8.20 |
£8.36 |
2.0% |
|
18-20 year old rate (NMW) |
£6.45 |
£6.56 |
1.7% |
|
16-17 year old rate (NMW) |
£4.55 |
£4.62 |
1.5% |
|
Apprentice rate |
£4.15 |
£4.30 |
3.6% |
|
Accommodation offset |
£8.20 |
£8.36 |
2.0% |
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
