Guides & Advice

Five changes to employment law that HR managers need to be aware of from April 2021

Published: 1st April 2021
Area: Employment

Following on from our winter update, here’s a reminder of the changes to employment law which come into effect from April 2021.

  1. IR35 comes into force in the private sector

Having been delayed for a year due to the COVID-19 pandemic, reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021.

The rules will apply to medium and large private sector companies and are aimed at reducing tax avoidance for contractors employed via personal service companies.

Under the new rules the company appointing the contractor is responsible for determining the individual’s employment status and assessing whether IR35 applies. If IR35 applies, the company that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.

With April just around the corner, read more about the changes, what this means for employers and the practical steps you can take now.

  1. Increases in National Minimum Wage and National Living Wage

New rates for the National Living Wage and the National Minimum Wage will apply from 1 April 2021.

The National Living Wage, which currently only applies to workers aged 25 or over, will now be extended to cover 23 and 24 year-olds for the first time. The new rates will be:

  • Those aged 23 or over (National Living Wage rate): £8.91 (up 2.2% from £8.72)
  • 21 to 22: £8.36 (up 2% from £8.20)
  • 18 to 20: £6.56 (up 1.7% from £6.45)
  • 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)

You can find out who is entitled to the National Minimum Wage and National Living Wage on the gov.uk website.

  1. Increase in statutory sick pay

On 4 April 2021 the weekly rate of statutory sick pay will increase to £96.35 (up from £95.85), paid for up to 28 weeks.

It is paid for the days an employee would normally work (called ‘qualifying days’) in the same way as wages, for example on the normal payday, deducting tax and national insurance.

As a reminder, if an employee is off sick or self-isolating because of COVID-19, or has tested positive, they are entitled to claim statutory sick pay from the first ‘qualifying day’ they are off work (as long as they are off for at least four days in a row).

Read more about statutory sick pay during COVID-19.

  1. Increase in parental leave pay

From 4 April 2021 the weekly statutory rates of pay for the following will be £151.97 (up from £151.20), or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate.

  • Maternity pay
  • Maternity allowance
  • Paternity pay
  • Shared parental pay
  • Adoption pay

On 4 April 2021 we will also see the first annual increase for statutory parental bereavement pay. This follows the introduction of the right to parental bereavement leave, available to the parents of a child who died on or after 6 April 2020.

Read more about the above rates on the financial support for families section of the gov.uk website.

  1. Increase on the cap of weekly pay for redundancy payments

On 6 April 2021 the weekly cap on pay will increase from £538 to £544. Any statutory redundancy payments paid to employees made redundant on or after 6 April will need to take into account this increase.

To be eligible to receive statutory redundancy pay, an individual must:

  • have at least 2 years’ continuous service;
  • be an employee working under a contract of employment; and
  • have been dismissed, laid off or put on short-time working (those who opt for early retirement do not qualify).

You can find more information on the current level of statutory redundancy pay rates here.

It’s also worth noting that if an employee is made redundant whilst on furlough, their redundancy payment needs to be based on what they would have earned normally (not their furlough pay).

Read our guide on best practices if making redundancies during COVID-19.

We’re here to help

In addition to the five key changes above, Vento bands (for injury to feelings awards) will increase from 6 April 2021. Read more about the updated guidance here.

If you need support with any employment-related issue, speak to a member of your local employment team.

Our employment team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your business out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Timeline of changes - April 2021
Timeline of employment law changes from April 2021

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

Fire and Re-hire – the controversy and the law

21 Apr

Matt McDonald, Partner
Fire and Re-hire – the controversy and the law

So why is fire and re-hire controversial, and what do employers need to consider […]

Agriculture: Partnership Agreements

22 Apr

Peter Snodgrass, Partner & Head of Agriculture | Jennie Wheildon, Legal Director
Agriculture: Partnership Agreements

This bite size webinar is intended help you firstly identify a partnership and then […]

Build to Rent & Retirement Living

27 Apr

Louise Drew, Partner & Head of Building Communities
Build to Rent & Retirement Living

Our panel will discuss the differences and synergies between the markets and lessons that […]

AEEC (Association of European Energy Consultants) Spring Conference Decarbonising by 2050

29 Apr

Andrew Whitehead, Senior Partner & Head of Energy
AEEC (Association of European Energy Consultants) Spring Conference Decarbonising by 2050

Join us at the AEEC Spring Conference on 29 April 2021 to hear more […]

National Design Code: Beauty is in the eye of the beholder

24 Mar

Richard Cooke, Associate Director | David Pendle, Associate Director
National Design Code: Beauty is in the eye of the beholder

Design is currently a hot topic of debate, with the Government consulting on a […]

When does a mental health condition become a disability? Managing mental health in the workplace

17 Mar

Matt McDonald, Partner
When does a mental health condition become a disability? Managing mental health in the workplace

We will cover: Recognising mental health issues in the workplace, what employers can do, […]

Agriculture: Agricultural Tenancies and Tenancy Reform

11 Mar

Jennie Wheildon, Legal Director | Peter Snodgrass, Partner & Head of Agriculture
Agriculture: Agricultural Tenancies and Tenancy Reform

Peter Snodgrass and Jennie Wheildon are in conversation discussing how to identify the difference […]

Covid-19 vaccine – what employers need to know

10 Mar

Matt McDonald, Partner
Covid-19 vaccine – what employers need to know

In this webinar, Matt McDonald – partner in our employment team – will discuss […]

Our Latest Thoughts

All the latest views and insights on current topics.

Uber v Aslam: a win for workers

12 Apr

Employment

Uber v Aslam: a win for workers

Read article Right Arrow

What are the true costs of redundancy?

9 Apr

Employment

What are the true costs of redundancy?

Read article Right Arrow

Are employees with long COVID entitled to compensation?

8 Apr

Employment

Are employees with long COVID entitled to compensation?

Read article Right Arrow

Discrimination | Vento bands for injury to feelings awards increase from April 2021

6 Apr

Employment

Discrimination | Vento bands for injury to feelings awards increase from April 2021

Read article Right Arrow

Five changes to employment law that HR managers need to be aware of from April 2021

1 Apr

Employment

Five changes to employment law that HR managers need to be aware of from April 2021

Read article Right Arrow