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Insight

Key employment law changes - April 2021

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United Kingdom

Every April the UK Government makes changes to various rates and limits in employment law, and we often see other new legislation that has been in the pipeline come into force. This year is no different.

IR35

The most significant change this year for most employers is likely to be the extension of the IR35 rules to the private sector. From 6 April 2021, the requirement to ensure working practices are compliant with IR35 is shifting to the end user. We have written extensively on this topic, so, for this insight, we will focus on other impending changes.

National Minimum Wage / National Living Wage

The following National Minimum Wage and National Living Wage rates will come into effect from 1 April 2021:

  • The National Living Wage (workers aged 23 and over): £8.91
  • The standard adult rate (workers aged 21-22): £8.36
  • The development rate (workers aged 18-20): £6.56
  • The young workers rate (workers aged 16 and 17 who are not apprentices): £4.62
  • The apprentice rate (apprentices under 19 or aged 19 or over and in the first year of apprenticeship): £4.30
For a more detailed analysis of the changes to the National Minimum Wage and National Living Wage in the context of the Covid-19 pandemic and a shrinking economy, please click here.

Family related pay and Statutory Sick Pay

Other changes to statutory rates for employers to be aware of include:
  • Statutory Sick Pay will increase to £96.35 per week, from 6 April 2021.
  • Statutory maternity, adoption, shared parental, paternity and parental bereavement pay will increase by 77 pence a week to £151.97 per week, from 4 April 2021.
Unfair dismissal and redundancy pay calculations:

New limits on unfair dismissal basic and compensatory awards, and statutory redundancy pay, will also come into force in April:
  • Unfair Dismissal: the statutory maximum compensatory award will increase to a maximum of £89,493, from 6 April 2021, or 52 weeks' pay (whichever is lower).
  • Basic award/statutory redundancy: the maximum basic award in unfair dismissal cases, and the maximum statutory redundancy payment will increase to £16,320, from 6 April 2021. Similarly, the limit on a week's pay used to calculate many statutory payments will increase to £544.

This article was co-written by Shafagh Daneshfar. 

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