9 Employment law changes in April 2021
April 2021 brings with it the usual employment law changes that SMEs need to be aware of. This year due to the impact of coronavirus, there’s a few updates that are out of ordinary – the first being the changes to IR35 in the public sector which was delayed by a year.
1 April 2021 – National Minimum Wage changes
From April 2021 not only will increases to the rates be applied, but the National Living Wage age bracket will be lowered to start at 23, meaning the National Minimum Wage age category 23-24 will be removed.
The increases are:
- National Living Wage (23+) to increase 2.2%, from £8.72 to £8.91
- National Minimum Wage (21-22) to increase 2%, from £8.20 to £8.36
- National Minimum Wage (18-20) to increase 1.7% from £6.45 to £6.56
- National Minimum Wage (under 18) to increase 1.5% from £4.55 to £4.62
- Apprenticeship Wage to increase 3.6% from £4.15 to £4.30
1 April 2021 – COVID-19 shielding ends
From Thursday 1 April, individuals will no longer be required to shield. As a result, they will no longer be eligible for Statutory Sick Pay (SSP) or Employment and Support Allowance (ESA) and similar benefits as a result of being asked to shield. The guidance is still work from home where possible, but if employees can’t work from home, they should go to the workplace.
4 April 2021 – Statutory family related pay and statutory sick pay increases
The weekly rate of statutory maternity, paternity, adoption, shared parental increases to £151.97 or 90% of average weekly earnings, whichever is lower.
You should ensure your employees on any of the above are paid the new statutory minimum rates. You should also review your maternity and sickness absence policies and documents that mention rates and update them.
4 April 2021 – Parental bereavement pay
Parental bereavement pay increases to £151.97 for a maximum of 2 weeks paid.
6 April 2021 – IR35 Contracts
The IR35 changes were delayed by a year, but now come into effect from 6 April 2021.
They apply to organisations which use contractors, engaged via personal service companies (e.g.an IT consultant who invoices the client via his own Limited company). All medium or large-sized private sector (in addition to current public sector) organisations will be responsible for deciding the employment status of such workers.
If the IR35 rules apply, the worker’s fees will be subject to tax and National Insurance contributions which the client must ensure are deducted.
6 April 2021 – Statutory Sick Pay increases to £96.35
Statutory Sick Pay increases to £96.35 for a maximum of 28 weeks paid.
6 April 2021 – Statutory Redundancy Pay calculations
With effect from 6 April 21, the weekly limit on statutory redundancy pay increases from £538 per week to £544 per week. If you’re a Primed client, our Redundancy guidance pages and template letters have been updated to reflect this.
If you’re planning to make redundancies on or after 6 April, you must pay those with 2 years’ service an amount based on their weekly pay, length of service and age, subject to the maximum amount which from 6 April 2021 is £544.
6 April 2021 – Unfair dismissal awards
The maximum basic award for unfair dismissal will be £16,320 whilst the Maximum compensation award rises to £89,493 (or 52 weeks’ gross pay if lower) for unfair dismissals that take place on or after 6 April 2021.
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