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Employment law changes in 2021

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Employment law changes in 2021

As we approach the end of what has been a truly one of a kind year (we hope!) here’s a reminder of what to look out for in the employment law world in 2021:

Furlough scheme changes 

The government said it will review the Coronvirus Job Retention Scheme in January and could be asking employers to contribute more. Employers should think about what it will mean for their business if its furloughed workforce becomes costlier. Don’t forget that, until further notice, the job retention bonus has been scrapped and won’t be paid, as originally planned, in February.

CJRS claims to be made public

HMRC will start publishing details of employers' CJRS claims on GOV.UK from February 2021. The published information, relating to claim periods starting on or after 1 December 2020, will include the employer name, an indication of the value of the claim within a banded range and the company number (for companies and LLPs). From February, furloughed employees will also be able to see details of claims made for them after 1 December 2020 in their personal tax account.

Brexit and travel 

The transition period ends on 31 December 2020 and any British citizen travelling abroad, including for business reasons, will need to be aware of the additional requirements. Check whether your passport needs renewing: on the day you travel, you’ll need your passport to both:

  1. have at least 6 months left
  2. be less than 10 years old (even if it has 6 months or more left)

If you do not renew your passport, you may not be able to travel to most EU countries and Iceland, Liechtenstein, Norway and Switzerland. If you need to travel for business (including for meetings) there are additional actions to take:        

  1. Check the entry requirements of the country you’re visiting
  2. Check your professional qualifications will be recognised if you’re going to be providing services
  3. Check whether you need indemnity insurance for employees
  4. Check whether you have permission to take goods out of the UK, even if only temporarily (e.g. taking samples to a trade show)

IR35 changes 

The changes were delayed by a year, but with effect from 6 April 2021. They apply to organisations which use contractors, engaged via personal service companies (e.g. an IT consultant who invoices the client via his own Limited company). All medium or large-sized private sector (in addition to current public sector) organisations will be responsible for deciding the employment status of such workers. If the IR35 rules apply, the worker’s fees will be subject to tax and National Insurance contributions which the client must ensure are deducted.

EU Settlement Scheme deadline 

EU nationals must be resident in the UK by 31 December in order to qualify for Settled Status, but they have until 30 June 2021 to apply. Being resident means more than just having a job offer, or even being put on payroll, but an EU national who is resident must apply by the June deadline, or lose their opportunity.

The end of non-compete clauses?

The government is currently consulting on the use of post termination non-compete clauses. This included whether employers should have to pay for the period of non-compete, as is the case in many EU countries, or their use should be abolished altogether. The consultation closes on 26 February 2021. To view the consultation and submit your response, click here.

National Minimum and Living Wage changes 

From April 2021 not only will increases to the rates be applied, but the National Living Wage age bracket will be lowered to start at 23, meaning the National Minimum Wage age category 23-24 will be removed. The increases are:

  1. National Living Wage (23+) to increase 2.2%, from £8.72 to £8.91
  2. National Minimum Wage (21-22) to increase 2%, from £8.20 to £8.36
  3. National Minimum Wage (18-20) to increase 1.7% from £6.45 to £6.56
  4. National Minimum Wage (under 18) to increase 1.5% from £4.55 to £4.62
  5. Apprenticeship Wage to increase 3.6% from £4.15 to £4.30