What lies ahead for employment law in 2021?

By KMC Human Resources

21 Dec 2020

Nobody could have predicted at the start of 2020 what the year ahead would hold for businesses and their employees.

From remote working to furlough, self-isolating staff to redundancies, it has been a turbulent and difficult year for many of those that are responsible for or manage staff.

Looking ahead to 2021, employers will want to be as prepared as they can be for the things we do know are on the horizon. Here are the key things for employers to look out for.

The end of the Coronavirus Job Retention Scheme

The Chancellor of the Exchequer, Rishi Sunak, announced on 17 December 2020 that the Coronavirus Job Retention Scheme, or CJRS, is being extended until the end of April 2021.

This is a further extension of a month, following on from the last extension announced at the end of October. By the time this latest extension expires, the CJRS will have been in place for over a year.

The scheme currently allows qualifying staff to be placed on furlough, with employers able to claim 80% of their salary up to a cap of £2,500 per month per employee. Flexible furlough is also available, meaning employees can work part time, with their unworked hours covered by the grant. Employers must continue to pay National Insurance and Pensions contributions whilst they claim under the CJRS.

The government has said that it will review the terms of the scheme in January, which may see employers being required to contribute a proportion of employees’ wages.

Employers using the scheme will also need to plan for its end date and decide on their response moving forward.

Changes to IR35 rules

Larger businesses within the private sector that use individual contractors will need to watch out for new rules, due to come in on 6th April 2021. The rules, which have applied to the public sector since 2017, place the onus of checking the status of private contractors on an organisation. Only applying to businesses that have over 50 employees, a net turnover in excess of £10.2m or over £5.1m on their balance sheet, the rule changes will not affect the majority of small businesses.

In anticipation of these changes, it is essential that businesses that will be affected undertake a review of any independent contractors to determine whether the new rules under IR35 apply, then review their contracts and pay arrangements accordingly.

Brexit and employing EEA nationals

With the UK’s transition period for exiting the EU coming to an end on 31st December, employers will need to have a firm grip on the new rules regarding employing EEA nations from 1st January. From this date, employers will need to have a sponsor licence to hire most workers from outside the UK. The new immigration system being introduced will treat workers from the EU the same as those entering the UK to work from anywhere else in the world. The rules will not apply to those from Ireland.

EEA and Swiss citizens who are already employed by a UK business and are living in the UK by 31 December 2020 can apply to the EU Settlement Scheme. They have until 30 June 2021 to apply.

National Minimum Wage changes

New national minimum wage rates come into effect from 1 April each year. In April 2021, the national living wage will increase by 2.2% to £8.91 per hour and will, for the first time, apply to all workers aged 23 or over, instead of the previous 25 years of age.

Other minimum rates of pay will apply to apprentices and those aged between 16 and 22 years.

Other potential changes…

A new Employment Bill, as announced in the December 2019 Queen’s Speech, is expected to be published in 2021. Although not all of the Bill’s contents will come into effect next year, some of the items that are anticipated to come into play include:

The extension of redundancy protection to cover pregnant employees from the date they notify the employer of their pregnancy. The protection could also last for a period of six months after the end of their pregnancy and would be in addition to other maternity rights. Extended leave for parents of children in neonatal care to implement a new right for parents to take an additional week of leave for every week their baby is in neonatal care, up to a maximum of 12 weeks. A new right to a week’s leave for employed carers to introduce a new right for employees with caring responsibilities to take a week’s unpaid leave per year.

Employers that made it through 2020 will be only too aware of the speed in which circumstances can change. Having an HR expert on hand can help you to not only make decisions at the right time, but also to ensure compliance with the law as it stands.

For any help or advice on any of the above, please get in touch for further information.

Latest news

1

BAE Systems workers vote for strike action BAE Systems production

BAE Systems workers vote for strike action

23 Oct 2025

2

National Cyber Force launches startup programme in the North West Nick Miles, National Cyber Force deputy director for Samlesbury

National Cyber Force launches startup programme in the North West

23 Oct 2025

3

Foresight announces £90m first close of its third North West regional investment fund Foresight announces £90 million first close of its third dedicated North West regional investment fund

Foresight announces £90m first close of its third North West regional investment fund

23 Oct 2025

4

McMurrays Haulage expands fleet after contract win Warehouse Supervisor at Pets Choice Brad Eddleston and McMurrays Sales Manager Rob Spencer. Photo credit: McMurrays Haulage Limited

McMurrays Haulage expands fleet after contract win

21 Oct 2025

5

Dragons' Den star to shine on Lancashire Business Day Derry Green

Dragons' Den star to shine on Lancashire Business Day

21 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Chamber Business Lunch – October
LBV Hub Networking
24 Oct 2025 - 24 Sep 2025

Chamber Business Lunch – October

Lancaster Golf Club, Lancaster, LA2 0AJ

11:00 - 13:30

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Lancaster District Business Support Expo
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
29 Oct 2025 - 29 Oct 2025

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

10:00 - 15:00

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Beyond the Brand: Building trust through values and integrity
1.png.png
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

Beyond the Brand: Building trust through values and integrity

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin