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Employment Law April Updates

Employment Law changes that were delayed last year have come into force this year so be prepared for these. To get proactive advice to plan ahead, contact our Head of Client Employment & HR, Kate Wargen

Employment Law Changes this month

1 April 2021 The National Living Wage increased from £8.72 to £8.91. The main (adult) rate of the national minimum wage rose from £8.20 to £8.36 per hour. The rate for workers who are aged at least 18 but under 21 increased from £6.45 to £6.56 per hour, the rate for workers aged 16 to 17 rose from £4.55 to £4.62 per hour and the apprentice rate has risen from £4.15 to £4.30 per hour. The accommodation offset increased from £8.20 to £8.36 per day. The National Living Wage rate applies to workers aged 23 and over, and the main (adult) rate applies to workers aged 21 to 22. 4 April 2021 The Rates of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay increased from £151.20 to £151.97 per week. 6 April 2021
  • Redundancy Payment Compensation for Unfair Dismissal the maximum amount of a week’s pay for the purpose of calculating aredundancy payment and the basic and additional award of compensation for unfair dismissal increased to £544.
  • Unfair Dismissals The maximum compensatory award for unfair dismissals increased from £88,519 to £89,493 for dismissals that take place on or after 6 April 2021.
  • Statutory Sick Pay increased from £95.85 to £96.35 a week.
  • New Rules on Off-Payroll Working came into effect for eligible large and medium sized organisations in the private sector. The intention of these rules is the reduction of tax avoidance for contractors employed via personal service companies. Under the new rules, the organisation engaging the contractor is responsible for determining their employment status and assessing whether IR35 applies. When an organisation has determined an individual’s classification, it must provide a status determination statement to the individual and to the party with which the organisation has contracted, giving the reason for the determination.

Stress Awareness Month

It’s now over a year since we saw the world go into various degrees of lockdown. Nobody could have predicted what was going to happen or the effect that it would have on everyone. Although for some time has stood still, for others their lives have changed beyond measure through losing loved ones, their work and even for some their home. It’s important to recognise that stress will be a contributing factor to returning to work, or indeed, remaining at work. Employers can greatly ease this for their employees leading to long term benefits to the organisation Stress Awareness Month has been held every April, since 1992.stress During this annual thirty-day period, health care professionals and health promotion experts across the country will join forces to increase public awareness about both the causes and cures for our modern stress epidemic. The UK Health and Safety Executive (HSE) definition of work-related stress is: ‘The adverse reaction people have to excessive pressures or other types of demand placed on them at work’. Stress can place immense demands on employees’ physical and mental health and affect their behaviour, performance, and relationships with colleagues. It’s a major cause of long-term absence from work. Knowing how to manage the factors that can cause work-related stress is key to managing people effectively. Employers should conduct stress risk assessments and manage workplace activities to reduce the likelihood of stress developing. Under UK health and safety legislation and common law, employers have a duty to take care of employees. The Health and Safety Executive says that employers have a legal duty to protect employees from stress at work by doing a risk assessment and acting on it. There is no one statute specifically covering the issue of workplace stress: several laws are relevant, and much of the law governing stress has evolved from case law rather than legislation. It’s important for employers to keep up to date with the implications of recent cases as the law in this area is continually evolving.  If you want training for your managers Kidwells Law Employment and HR Department can offer bespoke courses which explore how to develop an organisational framework for achieving better mental health for employees focusing on early intervention, prevention, and the role of line managers.   

Things to be aware of this month.

Changes to IR35 Rules The Government proposed amendments to IR35 rules which should have taken effect from 6 April 2020. However, in March 2020 the Government announced that those changes would be deferred and instead brought into effect on 6 April 2021, leaving businesses longer to prepare for the changes. The unpopularity of the intended rule changes amongst those adversely affected by them gave rise to a good deal of lobbying against the changes during 2020. Somewhat surprisingly, and especially given the impact of Covid-19, the Government has consistently refused to withdraw any of its proposals or to make any other concessions in response to lobbying and confirmed that it will go ahead as planned with the changes on 6 April 2021. Who do the changes affect? Any individual who works through a personal service company (“PSC”), and any business or other organisation that engages an individual through a PSC, needs to be aware of these forthcoming IR35 rule changes. Summary of the IR35 changes In brief, from 6 April 2021, if a PSC’s business client is in the private sector, the client, not the PSC, will now have to identify whether the payment of gross payments from the client to the PSC is caught by IR35 as “disguised employment”. However, this responsibility does not move from the PSC to that client where the client is classified by IR35 as “small”. (The size of the PSC and other intermediaries is not relevant for these purposes.) The private sector business client is “small” if at least two of the following apply to it:
  • annual turnover is less than £10.2 million.
  • balance sheet total is less than £5.1 million.
  • employees number less than an average of 50 in the year.
If it is not “small”, and its determination is that there is “disguised employment”, it will have to operate PAYE, and the remuneration it pays the PSC must be paid net of tax and NI. If that business client determines however that it is genuine self-employment, the business client will be able to pay the PSC the gross remuneration. Although the private sector business client has these responsibilities (unless it is “small”), the individual and their PSC, in their own interest, also need to establish the legal position under IR35 and its consequences to them. Separate rules apply where the PSC’s business client is in the public sector. Those rules are not amended by the April 2021 changes. 

Access to Relevant Contracts, Advice, and Policies

For Employment & HR matters, contact our Head of Client Employment & HR, Kate Wargen to get advice.

If you have a business in need of regular legal advice, ask about our Legal Shield Service and get updated whenever changes could affect your business and get on-call support.

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