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08 Jan 2021


Employers need to prepare for the new challenges of 2021

As we gladly leave 2020 behind us and look forward to a brand new – hopefully much more positive - year ahead, our head of employment law, Daniel Wilde, gives his advice to employers about the new changes that they need to be prepared for this year.

None of us could have been prepared for the challenges that faced us in 2020. Employers across the UK were blindsided by the start of the COVID pandemic and had to work quickly to adapt their homeworking policies, make decisions on staffing levels, apply for any Government support and deal with a whole host of employment-related issues that they’d never previously had to consider.

In 2021, although the pandemic is still ongoing and there are plenty of uncertainties ahead, there are at least some known changes coming that employers can prepare for now.


1. Get to grips with the new immigration system

Now that Britain has fully left the EU, there is a new points-based immigration system in place. Any EEA nationals who arrive in the UK will now need to comply with the same visa requirements as other non-UK nationals.

All employers will need to understand how the new system will affect their recruitment plans and should consider whether they will need to apply for a sponsorship licence.

Employers may wish to consider encouraging their existing EEA employees to apply either for settled or for pre-settled status, if they have not already done so.

It’s worth remembering that any European nationals who were already in the UK before 1 January have a grace period until 30 June 2021 to apply under the settlement scheme but employers will need to understand the rules on right to work checks during this period.


2. Review any private sector contracts for IR35

Having been delayed for a year because of the pandemic, reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021. Aimed at reducing tax avoidance for contractors, the new rules will mean that the organisation engaging the contractor is responsible for determining their employment status and assessing whether or not IR35 applies. If it does, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.

All employers should review their contracts and put in place the necessary procedures to ensure they are compliant.


3. Prepare for changes to the national minimum wage

The minimum wage – which has been rebranded as the National Living Wage – will increase by 2.2% – or 19p – to £8.91 an hour from April 2021. The age from which employees are entitled to the national living wage (the highest rate) is also due to reduce from 25 to 23 from 1 April 2021.

Employers should make sure they are ready to comply with the new rules.


4. Plan for changes to the Coronavirus Job Retention Scheme

Clearly, despite the promising news of the vaccine, the Covid pandemic will continue to present challenges for HR departments for the first few months of 2021, if not longer. From how to manage homeworking and planning for business continuity, to redundancies and ensuring the health and safety of staff, the consequences of the virus will continue to make life difficult for us all for some time yet.

The Coronavirus Job Retention Scheme, which was due to close at the end of October 2020, has now been extended until 30th April 2021. Currently, the Government’s plan is to keep the scheme, which will cover 80% of furloughed employees’ wages (capped at £2,500 per month) running until 31 January 2021.

The terms of the scheme will be reviewed this month and it will be decided what proportion – if any – of employees’ wages that employers will be required to contribute.

While they wait for an update, employers will need to assess how any changes to the scheme will impact their business and plan how to respond when the scheme comes to an end.


5. Comply with any new rules on publishing modern slavery statements

The Government has also committed to making changes to the rules on publishing modern slavery and human trafficking statements this year.

It will be mandatory for organisations to report on certain areas when publishing their statement. There will be a government-run reporting service and a single reporting deadline by which all firms will be required to publish their reports. The duty to publish a statement will be extended to public sector bodies with a budget of £36 million or more.


6. Be aware that redundancy protection for pregnant employees and new parents may be extended this year

Back in 2019, the Government consulted on extending redundancy protection – or the right to be offered suitable alternative employment – for employees taking maternity leave and for other new parents. At the time, it committed to extending the period of protection so that it would apply from the point the employee informs their employer that they are pregnant and continue for six months after their return to work.

The government also confirmed that there would be extensions to these protection periods for any employees taking adoption leave and shared parental leave.

Although an Employment Bill was announced in the December 2019 Queen’s Speech, to include these measures, no date has yet been set for the changes to be brought into force.


7. Make sure that other potential changes are on your radar

There are several other employment law developments that the government has previously announced but not yet set out a timetable for, so they may well be introduced in 2021.

These include:

  • Further reforms to termination pay in the public sector
  • Measures to ensure that tips left for workers go to them in full
  • A new right for all workers to request a more predictable contract, and
  • An increase to the length of time required for continuity of employment to be broken.


We will be providing updates on all of these changes as they happen through our series of blogs and social media posts but if you require any more detailed employment law-related advice, please drop me a line at wilded@hevans.com, call me on 01633 760662 or visit www.hardingevans.com.

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