What lies ahead for employment law in 2021?

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.