Employment Law Changes Roundup
April, as always, brings changes to employment law. The main changes you need to know about are:
1 April 2021 – National Living Wage (‘NLW’)
From 1 April 2021 the NLW is extended to workers aged 23 and over and increases to £8.91 per hour. The other rates change:
- for 21 to 22 year olds from £8.20 to £8.36
- for 18-20 year olds from £6.45 to £6.56
- for 16-17 year olds from £4.55 to £4.62
- for apprentices from £4.15 to £4.30
4 April 2021 – Statutory family-related pay
Statutory Maternity Pay, Statutory Paternity Pay, Shared Parental Pay, Statutory Adoption Pay and Statutory Parental Bereavement Pay all increase to £151.97 per week from 4 April 2021.
6 April 2021 – Statutory Sick Pay (SSP)
From 6 April 2021 SSP increases from £95.85 to £96.35 per week.
6 April 2021 – A week’s pay and maximum compensatory award
The cap on a week’s pay for the purposes of calculating a statutory redundancy payment and the basic award for unfair dismissal increase from £538 to £545 per week for dismissals from 6 April 2021. The maximum compensatory award for unfair dismissal claims increases from £88,519 to £89,453 where the effective date of termination is on or after 6 April 2021.
6 April 2021 – IR35
Off Payroll working is to be extended to large and medium sized private sector employers. An employer is defined as medium or large if it is not small. A corporate entity is small if it satisfies two or more of the following requirements:
- Its annual turnover is not more than £10.2 million.
- Its balance sheet total is not more than £5.1 million.
- It has not more than 50 employees.
The rules on off -payroll working are intended to counter non-compliance with IR35. The measure shifts the compliance burden from the worker’s personal service company to the medium and large “client” organisations that they work for, by treating the client organisation as an employer for income tax and NICs purposes
6 April 2021 – PENP
A new Post Employment Notice Pay (‘PENP’) formula applies from 6 April 2021 for use where an employee’s pay period is defined in months, but their contractual notice period or post-employment notice period is not a whole number of months. The new formula provides that, instead of using the number of days in the pay period, 30.42 (being the mean average number of days in a month) can be used as “P” in the PENP calculation. This measure ensures that PENP does not vary according to the number of days in the monthly pay period preceding the trigger date where the remuneration for that period would not have varied.