SYLO | Beyond HR. are pleased to provide you with our fourth and final quarterly employment law update for this year, and what an extraordinary year it has been!
Below you will find a summary of the latest key updates, news and developments through to December 2020 with a look at what is to come in 2021.
Since publication of our last update in September, the Covid-19 pandemic and the associated employment implications has certainly continued to take further twists and turns.
The second national lockdown which ended on 2nd December was a further blow to many businesses who were forced to close their doors and, a last-minute extension of the furlough scheme to 31st March 2021 was announced.
We are now currently living under tougher regional restrictions which sadly continues to impact businesses in the hospitality sector hardest.
Whilst social distancing and tough restrictions on our lives continue through the winter period, there is a glimmer of light on the horizon with the approval and roll out of the vaccination programme.
Should you wish to discuss any of the topics highlighted below and the impact and requirements on your business, please don’t hesitate to contact us.
1. COVID-19
Coronavirus Job Retention Scheme
While the Coronavirus Job Retention Scheme (CJRS) was meant to end on 31 October 2020, it has now been extended until 31 March 2021. The CJRS will continue for all UK nations, meaning that the Job Support Scheme (JSS), which was meant to begin on 1 November and replace the CJRS, will be postponed.
The government has reverted to the original structure of the CJRS, with some slight differences:
- employers are able to place their staff on furlough and claim 80% of their salary up to a cap of £2,500 per month per employee
- the difference is that employers will be asked to contribute National Insurance and Pensions contributions whilst they claim under the CJRS
- flexible furlough is also being extended so employees can work some hours and have their unworked hours covered by the CJRS
To be eligible for the extended CJRS, employers do not need to have used the CJRS before; employees need only have been on your PAYE payroll by 23:59 on 30 October. This means a Real-Time Information submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
2. Brexit
At the time of writing, the Government are carrying out last minute negotiations with the EU in relation to post-Brexit trade arrangements, in an attempt to reach a deal before the deadline of end of December.
As you may have seen from the government’s press campaign, they’ve developed a tool to help you check whether there are any steps you need to take in order to prepare. You can find it here:
If you hit the “start now” button, you’ll then answer a series of questions so that a personalised “to do” list can be generated for you. We would definitely recommend going through this process if you’ve not already done so.
Aside from the current negotiations to reach a deal, what we do know is that from an employment perspective, where you have EU citizens already working for you as at 31 December 2020, they can continue to work for you, and will have until 30 June 2021 to apply for the EU Settlement Scheme. You might want to encourage them to do this, if they haven’t already done so. From 1st January 2021 you’ll need a sponsor licence if you want to hire a new employee from outside the UK (excluding Irish citizens). If you think you may want to hire people from outside the UK, you should apply for a sponsor licence now. There’s more information on the Government website about the criteria that need to be met in respect of both the job and the worker you want to recruit.
3. NATIONAL LIVING WAGE AND NATIONAL MINIMUM WAGE
The Government recently announced the National Living Wage (NLW) and National Minimum Wage (NMW) rates which will come into force from April 2021.
The National Living Wage will increase by 2.2 per cent from £8.72 to £8.91 and will be extended to 23 and 24 year olds for the first time. For workers aged under 23, Commissioners recommended smaller increases in recognition of the risks to youth employment which the current economic situation poses.
| Rate from April 2020 | Rate from April 2021 | Increase % | |
| National Living Wage | £8.72 | £8.91 | 2.2% |
| 21-22 Year Old Rate | £8.20 | £8.36 | 2.0% |
| 18-20 Year Old Rate | £6.45 | £6.56 | 1.7% |
| 16-17 Year Old Rate | £4.55 | £4.62 | 1.5% |
| Apprentice Rate | £4.15 | £4.30 | 3.6% |
4. IR35 (Off-payroll rules for the Private Sector)
Originally due to take effect from 6 April 2020 but delayed to 6 April 2021, changes to IR35 rules will affect medium and large businesses within the private sector that use individual contractors. These changes will largely mirror changes that took effect in the public sector in 2017 but small businesses will not be affected. To be eligible, an organisation must meet at least two of the below criteria:
- have over 50 employees
- have a net turnover in excess of £10.2m
- have over £5.1m on their balance sheet
The IR35 rules apply where an individual (worker) personally performs services for another person (client), through an intermediary, usually a personal service company (PSC). If the services were provided under a direct contract, the worker would be regarded for tax purposes as being employed by the client. This is known as deemed employment.
At present, in the private sector it is the intermediary’s responsibility to determine whether there is deemed employment and IR35 applies. Under the new regime, for any services provided by an individual on or after 6 April 2021, the onus will shift from the PSC to the end user client to make a status determination. Responsibility for accounting for tax and national insurance will shift to the party which pays for the individual’s services, known as the fee-payer.
In anticipation of these changes, it is essential that medium and large businesses carry out an assessment to determine whether the new rules under IR35 apply to their independent contractors and review their contracts and pay arrangements.
5. EMPLOYMENT BILL
A new Employment Bill was announced in the December 2019 Queen’s Speech, and whilst this has not yet appeared in 2020, it is expected to be published in 2021. The measures expected to be included in the Bill are wide-ranging, and several originate out of the government’s 2018 Good work plan.
The Employment Bill is likely to include the following measures:
- The introduction of a single labour market enforcement body to ensure that vulnerable workers are better informed of their rights, and to support businesses in compliance. The remit of the new body formed the basis for a 2019 consultation, for which the government response is still awaited.
- Payment of all tips and service charges go to workers, with the distribution of these sums supported by a statutory Code of Practice.
- A new right to request a more predictable and stable contract after 26 weeks’ service, aimed at those engaged under contracts with variable and unpredictable hours, such as zero-hours employees. This was the subject of a 2019 consultation, for which the government response has not yet been published.
- Extending redundancy protection to cover pregnant employees from the date they notify the employer of their pregnancy and for a period of six months after the end of their pregnancy, in addition to the current protection that applies during maternity leave. This was also the subject of a 2019 consultation.
- Extended leave for parents of children in neonatal care (see below).
- A new right to a week’s (unpaid) leave for employed carers (see below).
6. NEONATAL LEAVE AND PAY
In March 2020, the government published a response to a 2019 consultation on proposals to introduce a new right to neonatal leave and pay.
The response confirmed that the government intends to bring forward legislation under the proposed Employment Bill to implement a new right for parents to take an additional week of leave for every week their baby is in neonatal care, up to a maximum of 12 weeks. It is likely that the leave will have to be taken in a continuous block of one or more weeks.
The leave will be added on to the end of the parent’s period of maternity or paternity leave and will be available to all employees. Those with a minimum qualifying period of 26 weeks’ service and who earn above the minimum pay threshold will be entitled to receive pay for the neonatal leave period at the current statutory rate.
There is currently no confirmed date for this new right to be implemented, although it is unlikely that it will be implemented before the end of 2021.
7. CARER’S LEAVE
The government issued a consultation in March 2020 on proposals to introduce a new right for employees with caring responsibilities to take a week’s unpaid leave per year.
The consultation sought views on who should be eligible for the leave, the purpose of the leave and applicable notification requirements.
The consultation closed in August 2020 and the government’s response is not yet available. There is no confirmed timescale for the new right to be introduced, but it is likely to be included in the government’s anticipated Employment Bill.
And finally……
As a valued client, we would like to continue to keep you updated on key topics which we feel would be of interest to you and your business, for example employment related COVID-19 developments, details of our online training programmes and our quarterly Employment Law update. Should you not wish to receive these updates then please let us know.
We would like to take this opportunity to thank you for your continued support and to wish you, your family and your teams a Merry Christmas and a Happy New Year.