Employment Law Changes in April 2021

From 1st April 2021, national minimum wage rates increased but April sees a number of further changes to Employment Laws from 4 April 2021.

Employment Law Review – What Changed in 2020 & What to Expect in 2021

On 1 April 2021, we highlighted the changes to the National Minimum Wage Rates last week, but there are a number of further changes which come into effect from 4 April 2021 including, changes to statutory sick pay, statutory family leave pay, Employment Tribunal compensation awards and rates and IR35 legislation.

Statutory Family Leave

From 4 April 2021, the weekly rates of statutory family leave (maternity/paternity leave, etc.) increased by 77p per week, from £151.20 per week to £151.97 per week.

Statutory Sick Pay

From 6 April 2021, the weekly rates for Statutory Sick Pay increase from £95.85 per week to £96.35 per week.  The lower earnings limit in relation to eligibility to statutory payments is to stay the same at £120 per week.

ET Compensation Awards and Rates

From 6 April 2021, employment tribunal compensation rates are to increase.  The maximum week’s pay for redundancy pay purposes will increase from £538 to £544. 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.

IR35 Legislation

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.