0800 140 4644
With April swiftly approaching, there are many key changes in Employment Law. We highlight the five key ones below with employment tribunal, statutory sick pay, family leave, minimum wages and perhaps for us, most significantly IR35 changes.
1. Employment Tribunal Compensation Awards and Rates
It has been confirmed that employment tribunal compensation rates are to increase from 6 April 2021. As of this date, the maximum week’s pay for redundancy pay purposes will increase from £538 to £544; however, statutory guarantee pay will be staying at £30.
This is important for the purposes of tribunal claims because it means that the maximum statutory redundancy pay, as well as unfair dismissal basic award pay, will both now be £16,320. The unfair dismissal compensatory award, which is set to compensate the claimant for past and future lost attributed to the dismissal, is a maximum of 52 weeks’ pay, subject to a new maximum of £89,493.
The maximum amount of additional award for unfair dismissal, set to compensate claimants when employers fail to adhere to a tribunal instruction to re-engage them, taking into account average weekly earnings, will rise to £28,288.
2. Statutory Sick Pack (‘SSP’)
SSP refers to the amount that employers must pay eligible employees if they are too ill to work. At present, it is paid for up to 28 weeks. SSP is currently available to people who are self-isolating, either because they or someone in their household has COVID-19. Outside of this, SSP is available for employees from the fourth day they are sick.
To be eligible for SSP, an employee must earn an average of £120 a week minimum and have been ill, self-isolating or shielding for at least four days in a row (including non-working days).
The current rate is £95.85 per week since 6 April 2020 and is set to rise to £96.35 from 6 April 2021. The lower earnings limit in relation to eligibility to statutory payments is to stay the same at £120 per week.
3. Family Leave
The weekly rates of statutory family leave – e.g. maternity/paternity leave, etc. will increase by 77p per week on 4 April 2021, from £151.20 per week to £151.97 per week.
4. Minimum Wage Rates
As Rishi Sunak announced in the Budget, from 1 April 2021, national minimum wage rates are also set to increase. The new hourly rates are as follows:
- Workers aged 23 and over (National Living Wage, ‘NLW’) – £8.91;
- Workers aged 21-22 – £8.36;
- Development rates for workers aged 18–20 – £6.56;
- Young workers rate for workers aged 16–17 – £4.62; and
- Apprentices under 19, or over 19 and in first year of the apprenticeship – £4.30.
As seen above, the NLW threshold is lowering to include all those aged 23 and over. Currently, the NLW is payable only to people who were aged 25 and over.
5. IR35
The IR35 legislation, which aims to ensure that contractors are paying the appropriate amount of tax, is also changing for some private sector businesses.
Currently, most contractors are required to determine their own status as employee or contractor; however, from 6 April 2021, this liability will pass to medium and large-sector clients. Smaller clients will be exempt from this obligation, and the contractor remains liable for determining their own tax status. We discuss this further in our recent blog.
Black and White Accounting
Whilst we are not HR professionals, these key issues are areas we discuss with our clients on a regular basis. If you need any specific help or support, we have some great consultants and solicitors, that are part of our team of Strategic Advisors, who are waiting in the wings, ready to help you if you need it.
Please get in touch with us today by contacting Black and White Chartered Certified Accountants, populate the “Got a Question” form on the right, or call us on 0800 140 4644 if there is anything we can do to help you.
At this most difficult of times, we are doing everything we can to help and support as many people as possible, for example by keeping them up to date with all the latest news you need to run your business. Why not sign up to our newsletter using the link below, or follow us across Facebook, Instagram, LinkedIn, Twitter and YouTube.
