Interested in employment changes to watch out for in 2021? Katherine Duff of Keeping HR Simple gives you the lowdown.
2020 was the year that made us quickly react to the unexpected as business owners and employers. Out went any kind of stability in most businesses and in came furlough with a whole set of rules and information to quickly get to grips with.
So, as we embark on 2021, what are we expecting from an employment point of view?
1. A new immigration system
The end of the Brexit transition period means two key actions for employers. If you already have EEA employees, you should be encouraging them to apply for settled or pre-settled status if they haven’t already done so (they have a grace period until 30th June to apply). Secondly, if you intend to recruit an EEA national, you will need to consider if you should apply for a sponsor licence.
Keeping HR Simple’s advice: make sure you understand the changes to the immigration system and how they will affect your current and any future employees.
2. Possible Coronavirus Job Retention Scheme (CJRS) changes
As we know, the CJRS (furlough scheme) was extended at the end of October and will now end on 31st March. However, the Government have rather ominously stated that they plan to review the terms in January to see if they think employers should be required to contribute a proportion of employees’ wages.
Keeping HR Simple’s advice: stay up to date with the changes, assess how they’ll impact your business and plan what you’re going to do by the end of March.
Having been postponed for a year, reforms to the IR35 rules come into force on 6th April 2021. If you use contractors, you will be responsible for determining their employment status and assessing whether or not IR35 applies. If it does, you as the organisation paying their fees will be deemed to be their employer for tax and NI purposes. It’s going to be more important than ever that the correct employment status is identified and in place.
Keeping HR Simple’s advice: if using contractors, the terms of engagement will need to be reviewed – take specialist advice to ensure you are staying on the right side of the law.
4. New NMW rates
From 1st April, we will have new National Minimum Wage rates as follows. National Living Wage will increase by 2.2% from £8.72 to £8.91 and will be extended to 23 and 24 year olds for the first time. Here are all the rate increases:
Keeping HR Simple’s advice: make sure your workforce are being paid at least the appropriate minimum wage rate for their age group and if necessary, include new rates in your 2021 budget for your business.
5. Keep an eye on the horizon
Other possible changes for 2021 include:
- Enhanced redundancy protection for pregnant employees and new parents;
- A new right for all workers to request a more predictable contract (e.g. someone on zero hours may be able to request a contract setting out a number of guaranteed hours depending on the circumstances);
- An increase to the length of time required for continuity of employment to be broken.
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