2021 Employment Law Changes

2020 was the year we didn’t expect. It should have been the year we were all talking about the biggest employment law updates for years, instead some of those were delayed and others may have been forgotten in the midst of the pandemic.

Brexit: Changes to Immigration

The Brexit transition period ends on 31 December 2020 resulting in a new immigration system coming into effect from 1 January 2021. EU nationals in the UK before 31 December 2020 are required to apply for settled status or pre-settled status if they have not been in the UK 5 years.

Application for settled or pre-settled status is the responsibility of the employee and cannot be completed by the employer. Employers should be providing employees with information about the scheme and encouraging them to apply, including providing any support required.

Employers will be required to check immigration status under the scheme of new employees from the 1 June 2021, before then there is no change to current right to work checks. Employers are not required to recheck the status of existing employees.

IR35: Off-payroll Working

Changes to IR35 for the private sector were due to come into effect in April 2020 but were delayed to April 2021 due to Coronavirus.

The rules aim to reduce tax avoidance by those who are working under personal service companies. The new rules do put the responsibility onto the engaging organisation to determine employment status and whether IR35 applies.

National Minimum and Living Wage

New national minimum wage and national living wage rates are due to apply from 1 April 2021. Details of new rates can be found here

Coronavirus Job Retention Scheme

As a nation we’ll continue to react to the constant changing landscape caused by the coronavirus pandemic. At the time of writing the Coronavirus Job Retention Scheme is due to end on 30 April 2021. The current rate of 80% payment of wages is due to be reviewed in January, it was expected to be reduced, however that was prior to the extension of the scheme from March to April and prior to a third nationwide lockdown being introduced.

The Wider Impact of Coronavirus

Whilst we react to the ever changing landscape and rules the focus for 2021 will be on business continuity. Making plans that focus on keeping business moving in the current environment whilst also being in the best place to react and adapt quickly. The coronavirus guidance and legislation is impacting how business is done, who can open, where and when, around this business does have a lot of scope to change ways of working and adapt.

Both employers and individuals will be reflecting this year on ways of working and how that fits with ways of life. We’ve seen huge increases in homeworking, whilst we have all the technology to make it work, changing mindsets and ways of managing people have been more problematic. We must also not forget we’re in the midst of a pandemic, regardless of individual circumstances, this puts pressure on individuals in different ways. Awareness of mental health and its impact on productivity has been highlighted in 2020.

Where ways of working have changed and employers need people doing different things or working at different times or in different locations this should be reflected in writing and where necessary in amendments to terms and conditions. Amendments to terms and conditions can be either temporary or permanent, if there is no contractual right to make the change you will need the individuals agreement.

April 2020 - A look back

Given the year 2020 has been, you’d be forgiven for missing the employment law changes that came into effect back in April 2020. These were the biggest changes for many years, in particular changing the information that must be issued to employees in their statement of particulars.

Employers are now required to issue a statement of particulars to all workers and employees by the end of day 1 of employment regardless of the length of that employment.

Holiday pay calculations changed in April 2020, requiring holiday pay to be calculated based on an average of the previous 52 weeks pay.

Parental Bereavement Leave came into effect in April 2020, giving primary carers the right to two weeks leave following the loss of a child under the age of 18, or a stillbirth after 24 weeks of pregnancy. This leave is paid for employees with 26 weeks’ continuous service.

Article last updated: 12 January 2021