5 employment law changes to be aware of, and what you need to do about them
Employment Law is constantly evolving. Is your business or organisation aware of the 5 changes due early April?
1.Employment tribunal compensation rates will increase from 6th April.
The maximum compensatory award for unfair dismissal will increase to £89,493 when termination is on or after 6th April 2021.
The maximum week’s pay for redundancy purposes will increase to £544 when termination is on or after 6th April 2021. When referring to tribunal claims, this increase is important to consider because it now means that both the maximum statutory redundancy pay, as well as unfair dismissal basic award pay will both be £16,320.
To do: update your statutory redundancy pay calculations!
2. Statutory sick pay (SSP) set to rise from 6th April
The weekly rate of SSP will increase from £95.85 to £96.35. The earnings threshold of £120 to qualify for SSP will stay the same.
To do: ensure that staff on SSP are paid the new statutory minimum rates. Contracts and policies that mention these rates also need to be updated.
3. Rates for family leave are due to increase from 4th April
The weekly rate of maternity, paternity, adoption, shared parental and parental bereavement pay will increase to £151.97 per week.
To do: make sure staff on the outlined leaves are paid at least the statutory amount and update any contracts and policies that mention these rates.
4. Minimum wage rates are increasing from 1st April
The new hourly rates are:
- Apprentices under 19 or over 19 in their first year – £4.30
- Young workers rate for those between 16-17 – £4.62
- Development rate for those between 18-20 – £6.56
- Workers between 21-22 – £8.36
- National Living Wage (23+) – £8.91
The National Living Wage threshold has also been lowered from 25 to 23 years old.
To do: ensure workers are being paid at least the national minimum wage that applies to them.
5. IR35 legislation changes from 6th April
IR35 rules are aimed at reducing tax avoidance and ensuring contractors are paying the correct tax. New rules mean the organisation engaging the contractor is responsible for determining their employment status and reviewing whether IR35 applies or not.
To do: review contracts and put in place the necessary actions to ensure compliance.
The above changes start in the next 2 weeks so you need to act quickly.
If you’d like practical guidance on upcoming changes, what you need to do to comply and how your organisation could benefit from the latest changes to employment law, join the Chamber for a ‘2020/21 Employment Law Review’ this Thursday, 25th March. Find out more and book here.
This article is for general information purposes and is not a substitute for professional legal advice.
© Cumbria Chamber of Commerce