News

Employment Winter Update: News in brief

Published: 20th January 2021
Area: Corporate & Commercial

A quick round up of the key employment law developments to watch out for.

National Minimum Wage

New rates for the national living wage (NLW) and the national minimum wage (NMW) will apply from 6 April 2021. The NLW, which currently applies only to workers age 25 or over, will be extended to cover 23 and 24-year-olds for the first time. The new rates will be:

Age 23 or over (NLW rate): £8.91 (up 2.2% from £8.72)
Age 21 to 22: £8.36 (up 2% from £8.20)
Age 18 to 20: £6.56 (up 1.7% from £6.45)
Age 16 to 17: £4.62 (up 1.5% from £4.55)
Apprentice rate: £4.30 (up 3.6% from £4.15)
Accommodation offset £8.36 per week (up 2% from £8.20)

Statutory sick pay and maternity rate increases

The Department for Work and Pensions has published its proposed increases to a number of statutory benefit payments. The following rates are expected to apply from 4 April 2021, although the rates will be confirmed once an order is made.

The weekly rate of statutory sick pay will be £96.35 (up from £95.85)
The weekly rates of statutory maternity pay, maternity allowance, statutory paternity pay, statutory shared parental pay and statutory adoption pay will be £151.97 (up from £151.20)

Government consultation on extending the ban on exclusivity clauses in employment contracts

On 4 December 2020, the government launched a consultation on measures to extend the ban on exclusivity clauses in employment contracts to cover those earning under the lower earnings limit, which is currently £120 a week. This would prevent employers from contractually restricting low earning employees from working for other employers.

The government previously consulted on this proposal but only introduced a ban on exclusivity clauses in zero-hours contracts. With low earners been particularly adversely affected by the COVID-19 pandemic, as and many employers are currently unable to offer employees sufficient hours for them to make ends meet, the government is revisiting the measure. The consultation will close on 26 February 2021.

Government consultation on reform of post-termination non-compete clauses in employment contracts

On 4 December 2020, the government also launched a consultation on measures to reform post-termination non-compete clauses in employment contracts. The consultation seeks views on proposals to require employers to continue paying compensation to employees for the duration of a post-termination non-compete clause; requiring employers to confirm in writing to employees the exact terms of a non-compete clause before their employment commences; introducing a statutory limit on the length of non-compete clauses, or banning the use of post-termination non-compete clauses altogether.

The consultation follows a call for evidence on the use of non-compete clauses in 2016, which found that they worked well and were a valuable and necessary tool for employers in protecting their business interests. The consultation will close on 26 February 2021.

For more information read our blog on the future of non-compete

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