Expected changes to employment law in 2021
2020 has been a turbulent year for employment law not least because of the Covid-19 pandemic. This blog will summarise the changes to employment law which are expected to be introduced in 2021.
- Changes to the immigration system
From 1 January 2021 a points-based immigration system will be put in place for European Economic Area nationals meaning that they will need to comply with the same requirements as non-UK nationals. This is likely to affect employers’ recruitment processes and employers may need to apply for a sponsor licence. - Increase to the National Minimum Wage (NMW) and National Living Wage (NLW)
It was recently announced by the Chancellor that the NLW would increase in April 2021 to £8.91 per hour for those aged 23 or over (a rise of £0.19 compared to this year’s rate). Whilst the increase is a lot smaller than usual due to the current economic climate, it is nevertheless likely to be welcomed by many employees and workers aged between 23 and 24, some of whom will receive a pay increase of nearly 9%.The rates of NMW will also be increased as follows:
| Age/type of worker | NMW rate from 6 April 2021 | Increase from last year |
| 21-22 | £8.36 | 2% (from £8.20) |
| 18-20 | £6.56 | 1.7% (from £6.45) |
| 16-17 | £4.62 | 1.5% (from £4.55) |
| Apprentices | £4.30 | 3.6% (from £4.15) |
- Changes to IR35
These changes had been meant to come into force in April this year. However, due to the Covid-19 pandemic, they were delayed. These changes will be implemented for medium and large businesses in the private sector and will largely mirror change which took effect in the public sector in 2017. Under the new regime, for all contracts entered into with, or payments made to, workers engaged through an intermediary on or after 6 April 2021, the onus will shift to the end user client to make a determination of the worker’s status for tax purposes. Responsibility for accounting for tax and national insurance will shift to the party who pays for the services.
- Continuation of the furlough scheme
Last month, the Chancellor announced that the Coronavirus Job Retention Scheme (Scheme) would be extended to March 2021. The Scheme allows employers to place employees on furlough leave and claim 80% of their usual monthly pay up to £2,500. The government has confirmed that it will review the scheme in early 2021 to determine whether employers will be required to contribute to part of the furloughed employee’s pay.
- Modern slavery statements
The government is in the process of creating an online platform whereby large businesses and public bodies will publish their modern slavery statement and report on any modern slavery risks within their operations and supply chains. The platform will be launched in early 2021, although a date has not yet been specified. It is hoped that publishing these statements on a government platform will enhance transparency and ensure employers are complying with the law.
If you have any questions about how these issues may affect your business, please email or call our Employment Law team today on 0113 207 0000.
Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
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Paul Kelly
