Introduction
SYLO | Beyond HR are pleased to provide you with our first quarterly employment law update for 2021.
Whilst we said good riddance to 2020 and, with hope on the horizon with the vaccination rollout, we didn’t necessarily envisage on the 1st January that the emergence of the newer highly transmissible ‘Kent’ variant of the virus would throw us all into another national lockdown, but here we are (again!). We do hope that you, your families and your colleagues are keeping safe and well in what has been a very difficult start to the year.
Below you will find a summary of the latest key updates, news and developments with a focus on the recent Budget announcement and a look at what is to come in 2021.
Should you wish to discuss any of the topics highlighted below and the impact and requirements on your business, please don’t hesitate to get in touch with us.
1) COVID-19
Coronavirus Job Retention Scheme Extension The Coronavirus Job Retention Scheme (CJRS) was due to come to an end on 30th April 2021, however, it has now been announced by the Chancellor that the scheme will continue until 30th September 2021. The scheme will continue in its current form, with employers able to claim 80% of salary to a maximum cap of £2,500 per month until the end of June. From July, the cost of the furlough scheme for employers will increase.
· From July, employers will need to cover at least 10% of salary (plus NI and Pension contributions) with the government contributing 70%.
· In August and September employers will be required to cover at least 20% of salary (plus NI and Pension Contributions) with the government contributing 60%.
With all restrictions due to be lifted no earlier than 21st June, as set out by the Prime Minister in his recent roadmap out of lockdown, the extension of the furlough scheme until September may have come as a surprise and no doubt a relief to many. Particularly industries such as hospitality, travel/tourism and events, of which have been severely impacted and will be some of the last in the roadmap to reopen. The extension will certainly give some much-needed breathing space to allow time for these businesses to start to recover.
Workforce Testing
The Government have recently introduced the opportunity for businesses with over 50 employees to register to receive lateral flow testing kits in the workplace. This is particularly helpful where you have employees who are not able to carry out their job from home. Whilst the government are keen for as many employers to sign up for regular testing of their workforce, this is of course voluntary for employers and also for employees, when it comes to taking the test. Further information and registration can be found here.
For employers with under 50 employees, where there is a requirement for people to leave their homes for work, community lateral flow testing can be accessed and local testing facilities are popping up across all local authority regions. This testing option is also being encouraged for parents and family members of children attending school.
Vaccinations
The Covid-19 vaccination programme is progressing at pace and at the time of writing over 22 million adults in the UK have received their first dose. The Government’s aim is to offer the vaccine to all over 50’s by mid-April and then all adults aged 18 – 49 years by the end of July.
There has been a lot of recent coverage in the media around whether employers are able to mandate employees take the vaccine. The ‘no jab, no job’ movement is the subject of much debate and we understand a few UK employers, mainly in adult social care, are considering implementing this type of policy for new recruits going forward.
Whilst it is understandable employers in higher-risk or public-facing sectors may wish to implement this type of policy, it is important to remember that taking the vaccine is not mandatory. The debate throws up many considerations and potential issues such as moral and ethical questions, human rights, health and safety responsibilities as well as discrimination grounds.
It will be interesting to see how this debate unfolds over time but, for now, we would advise employers look to support and encourage staff to take the vaccine. You can do this by providing your employees with helpful and factual information from official and reliable sources regarding the benefits of vaccination and, allowing flexibility and appropriate time off for staff to take the vaccine when it is their turn.
2) BREXIT
With the UK managing to reach a trade deal with the EU prior to the deadline of 30th December 2020, we have been eager to understand what this may mean in relation to employment. Whilst it is true that much of our employment law derives from EU, Brexit will have limited implications for employment law in the short to medium term. Whilst we left the EU on 1st January, we are still bound by all the legislation that we adopted whilst a member until the government specifically changes it. UK employment law will continue to be influenced by the EU for many years to come. This is because our courts will be bound by any decisions made by the European Courts prior to 31st December 2020.
In conclusion for 2021, we think very little will change as a result of Brexit when it comes to UK employment law. There have been some recent murmurs that GDPR may be changed but, for now, we continue as is. We will of course flag any changes or noteworthy developments in future communications.
Please note that where you have EU citizens already working for you as at 31st December 2020, they can continue to work for you, and, if they have not already, will have until 30th June 2021 to apply for the EU Settlement Scheme.
Should you wish to employ EU citizens now, you will need a sponsor licence if you want to hire new employees from outside the UK (excluding Irish citizens). If this is of interest, you should apply for a sponsor licence now. There is 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. You can find out more here.
As an employer, you must continue to check the right to work status of all employees.
3) NATIONAL LIVING WAGE/NATIONAL MINIMUM WAGE AND STATUTORY RATES INCREASES
The Government 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 percent 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 %
| 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% |
Statutory Rate Increases
The government have announced the proposed new rates for statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (ShPP) and statutory sick pay (SSP) for tax year 2021/22.
With effect from the 4th April 2021, the standard weekly rates of SMP, SAP, SPP and ShPP will increase from £151.20 to £151.97 (or 90% of the employee’s average weekly earnings, if lower) and the weekly rate of statutory sick pay will increase from £95.85 to £96.35 from 6th April 2021.
The lower earnings limit, below which employees are not entitled to SMP, SAP, SPP, ShPP and SSP, will remain unchanged at £120.00 per week.
The maximum amount of a week’s pay for the purposes of calculating statutory redundancy pay will increase to £544 (up from £538).
4) IR35 (Off-payroll rules for the Private Sector)
Originally due to take effect from 6th April 2020 but delayed to 6th April 2021 due to Covid, changes to IR35 rules will affect medium and large businesses only 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 6th 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) APPRENTICESHIPS AND KICKSTART SCHEME
Due to the pandemic, the impact on unemployment, especially in young people has been extremely high. In order to help address this and to help incentivise employers to create more opportunities for young people, the Chancellor put apprenticeships at the centre of his recovery plans by doubling the incentive payments given to employers.
Under the new plans, the government will pay an employer who hires a new apprentice between 1st April 2021 until 31st September £3,000.
This apprenticeship bonus is an increase on the previous scheme’s terms of £1,500 per new hire or £2,000 for those aged 24 and under. Unlike the previous scheme, the revised scheme is applicable for apprentices of all ages.
These payments are on top of the existing £1,000 that employers get for all new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
Additional funding of £7m will also be released by the government from July 2021 to enable apprentices to work across multiple projects with different employers. The government said that
these portable apprenticeships will give employers access to a “diverse apprenticeship talent pipeline”. Further details on the portable apprenticeships are still to be confirmed.
The Kickstart Scheme
Back in the Summer, the Chancellor unveiled the kickstart scheme and this scheme has been underway since September last year. In February it had a reboot by opening up for employers of all sizes, making it more accessible to smaller businesses, rather than its previous minimum threshold of 30 jobs.
In the Budget, the Chancellor highlighted the scheme’s success with 120,000 young people at risk of long-term unemployment helped by providing them with fully subsidised jobs. The funding for the scheme covers 100% of national minimum wage for 25 hours a week. Employers predominately in sectors such as retail, arts, manufacturing and construction are taking part in the scheme.
Should you wish to explore the details of either of these schemes further, please don’t hesitate to get in touch.
6) REDUNDANCY PROTECTIONS FOR PREGNANT EMPLOYEES AND NEW PARENTS
It is possible that there will be changes to the protections offered to pregnant employees and new parents in redundancy situations. At the moment, pregnant employees and new parents who are on a period of family leave have the right to be offered ‘any suitable alternative employment in a redundancy situation.
The proposed change is that the right to be offered any suitable alternative employment extends to cover:
· Pregnant employees, once they have told their employer that they are pregnant.
· Employees who have returned from maternity or adoption leave within the previous six months.
· Parents returning from shared parental leave.
This is definitely one we will watch closely as it could be a change that receives little publicity so goes by unnoticed but that catches employers out in redundancy situations.
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 updates. 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. Should you wish to discuss any of the topics highlighted in this bulletin, we would be very happy to discuss them with you. Please contact us.