Advice from Kate Palmer, HR Advice Director at Peninsula
With April only a few weeks away, employers need to be aware that some legislative changes are imminent, as well as some key details that should be considered when entering into minimum wages and contracting. With this in mind, here are five important changes in labor law that employers must take into account.
- ET Compensation Awards and Rates
It has been confirmed that the labor court’s compensation rates will increase from April 6, 2021. From that date, the maximum weekly wage for layoffs will increase from £ 538 to £ 544. However, the statutory warranty is £ 30.
This is important for tribunal claims purposes as it means that the maximum statutory dismissal pay as well as the base termination pay are now both £ 16,320. Unjustified Dismissal Compensation, which is designed to compensate the applicant for past and future losses attributable to the dismissal, is a maximum of 52 weeks, subject to a new maximum of £ 89,493.
The maximum amount of Additional Unjustified Dismissal Grant set to compensate applicants if employers fail to comply with a court order for reinstatement, taking into account average weekly earnings, will increase to £ 28,288.
Employers are responsible for paying statutory sick pay (SSP) to eligible employees. The current rate has been £ 95.85 per week since April 6, 2020 and is expected to increase to £ 96.35 from April 6, 2021. The lower limit of income in relation to eligibility for statutory payments should remain the same at £ 120 per week.
The weekly rates of statutory family leave – e.g. B. Maternity / Paternity Leave etc – will increase by 77p per week from £ 151.20 per week to £ 151.97 per week on April 4th 2021.
From April 1, 2021, the national minimum wage rates are also expected to rise. The new hourly rates are as follows:
- Workers 23 and over (National Living Wage) – £ 8.91
- Workers aged 21 to 22 – £ 8.36
- Development rates for workers aged 18 to 20 – £ 6.56
- Young Worker Price for workers aged 16-17 – £ 4.62
- Apprentices under 19 or over 19 and first year apprenticeship – £ 4.30.
- As shown above, the National Living Wage (NLW) threshold drops to all people aged 23 and over. Currently, the NLW is only payable to people aged 25 and over.
IR35 legislation, which aims to ensure that contractors pay the appropriate amount of tax, is also changing for some private sector companies.
Currently, most contractors have to determine their own status as an employee or a contractor. From April 6, 2021, however, this liability will be transferred to medium-sized and large customers. Smaller customers are exempt from this obligation and the contractor remains responsible for determining his own tax status.
As of April 2021, there are many changes to get used to, but employers need to understand each element of those changes and seek further advice if they are unsure about aspects of the laws in these areas.