2021 - A quiet year for employment legislation, if not for employers
Authored by ARAG
Between managing the response to the coronavirus pandemic and dealing with the various implications of leaving the European Union, it may come as something of a surprise to businesses that there is any new law on the horizon, from our legislators.
While coronavirus is likely to preoccupy parliament for some time to come, and the legislative implications of Brexit are far from done and dusted, there are still a few more mundane legal changes that businesses need to understand.
Perhaps the most significant is a change to the IR35 rules designed to prevent contractors who fulfil a similar role to employees from paying less than they otherwise might, in tax and National Insurance Contributions.
These rules have been in force for over twenty years, but the responsibility for determining whether or not they applied contractor always lay with the contractor themselves.
This changed for contractors working in the public sector back in 2017, since when the public sector organisation employing the contractor took on the responsibility of determining whether their ‘employment’ falls under the IR35 rules.
From April 6, the same responsibility will now fall to private sector business that use contractors, though organisations that qualify as ‘small’ under the Small Companies Regime (ie two of: turnover less than £10.2 million; balance sheet assets less than £5.1 million; and fewer than 50 employees).
The guidance on this new requirement is quite extensive and those that use contract workers must put processes in place before the new tax year begins.
A few days before that, employers will also have to adjust the pay of any staff who are paid at minimum wage levels, as the increases announced in the Chancellor’s Autumn Statement come into effect on April 1.
While the 2.2% hike to the headline National Living Wage doesn’t quite match the 6%+ increases awarded to all employees over 20, last year, the new, hourly rate of £8.91 is being extended to include 23 and 24 year-olds.
While it’s encouraging to think of those furloughed minimum-wage employees who will return to a pay-rise when the Coronavirus Job Retention Scheme closes on March 31, there are likely to be many who won’t return at all, given the huge number of redundancies that have already been reported.
Under normal circumstances (remember those?), a lot more of the employment legislation that has been suggested, consulted on and announced, might be coming in to force this Spring.
We are still due to see an extension to the limited protection from redundancy that employees on maternity, adoption or shared parental leave enjoy, but no date has, as yet, been set.
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