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Employment Law Changes in April 2021 – Employer’s Check List

Many of us are fixed on the important date of April 12 2021 when all shops are open and we can get a haircut! However, it’s also the point in the HR year when key changes become operational.

IR 35

If you’re not aware, IR35 is a tax anti-avoidance rule designed to prevent would-be employees from avoiding income tax by offering services through intermediaries.

 IR35 legislation specifically relates to the employment status of contractors, their relationship to clients, and taxation. From 6th April 2021, medium and large companies will be liable for determining the status of any off-payroll contractors they engage via intermediaries.

IR35 changes were put on hold last April 2021 but now become operational from 6 April 2021. The proposed IR 35 reform represents the biggest changes to employment tax for decades.

The new rules apply to businesses which meet 2 of the following 3 criteria:

  • turnover in excess of £10.2 million;
  • a balance sheet in excess of £5.1 million;
  • 50 or more employees ( including contractors).  

In addition to paying any tax and NI due, businesses who are found to be in breach of IR35 could also face financial penalties.

Gender Pay Gap Reporting

Gender Pay Gap reporting was suspended on 24 March 2020 as the Covid-19 pandemic took hold. This time, the Government has retained the reporting requirements but has put back the dates for the enforcement of reporting requirements to 5October 2021.

Those businesses with over 250 employees are still encouraged to undertake their reporting before October. If you have the figures, submit them as soon as possible and get ahead of the curve.

With some 10,000 companies registered for  pay gap reporting, it will be interesting to see how the Gender Reporting Gap figures have been affected by furlough especially when it is widely accepted that women have been disproportionately affected by the pandemic.

Many commentators are anticipating that Covid-19 will have had a significant effect on the gender pay gap. However delayed reporting regime may obscure the full impact of Covid-19 on the gender pay gap for a while.

It’s worth also considering how a company’s commitment to gender equality may be demonstrated by reporting to the original April 2021 deadline.

National Minimum Wage Rates

Whilst April is always the time that increases in the national minimum wage rates, this year there is a subtle but significant change related to age boundaries as the National Living Wage rate will now apply to 23 and 24 year olds (previously 25 years old +). You will need to audit your payroll  to establish which individuals are now eligible for the new rate of £8.91 per hour.

Update Statutory Redundancy Pay Calculations

The capped figure for working out statutory redundancy pay also increases from £538 to £544 per week for all dismissals on or after 6 April 2021.

It is estimated that some 800,000 jobs were lost from payrolls since the Covid-19 pandemic began, with around 370,000 people made redundant between August 2020 and October 2020 alone. As the furlough scheme starts to unwind towards it end on 30 September 2021 sadly we can expect further rounds of redundancies impacting on these already significant figures.

Family Related and Statutory Sick Pay

Statutory sick pay increases to £96.35 from 6 April 2021 onwards. It’s a figure that has been front and centre of the UK Covid-19 pandemic and one which has generated calls for a review and increase.

Interestingly, Matt Hancock Secretary of State for Health is reported to have raised  the issue at a meeting of the Government’s Covid-19 Operations Committee in a bid to create a healthier nation and the TUC in have consistently described the UK’s low SSP rates as a “gaping hole” in the test and trace programme.

Statutory Maternity, Paternity, Shared Parental Leave and Parental Bereavement Leave are increased to £151.97 per week.

Shared Parental leave continues to be a hot topic. It’s interesting to note that the latest figures from HMRC show that uptake of Shared Parental Leave during the four quarters of 2018/9 financial year was 15,900 but this figure does not reflect the annualised figure which is still as the Maternity Alliance highlights, ‘chronically low’.

If a free consultation would help your business get ready for the April 2021 changes or if a chat through on any other HR or employment law area would support your planning for the year ahead, don’t hesitate to get in touch with our expert employment law team on legal@lexleyton.co.uk

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