Coronavirus Job Retention Scheme

Originally slated to close on 30 April 2021, the Spring Budget on 3 March confirmed a further extension of furlough until 30 September 2021.  The UK Government will continue to pay 80% of employees' wages for unworked hours, with the employer picking up the costs of NICs and employer pension contributions, until the end of June 2021.  In July the employer will be required to contribute 10% to wages for unworked hours and in August and September that contribution increases to 20%.  The employer remains responsible for the full costs of wages for worked hours.  

National Living Wage/National Minimum Wage

This year 1 April will see a drop in the age at which employees become entitled to the National Living Wage from 25 to 23 years as well as the annual increase in rates.  The new rates will be:-

• NLW will increase from £8.72 per hour to £8.91 per hour (for those aged 23 and over)

• NMW 21 to 22 year old rate will increase from £8.20 per hour to £8.36 per hour

• NMW 18 to 20 year old rate will increase from £6.45 per hour to £6.56 per hour

• NMW 16 to 17 year old rate will increase from £4.55 per hour to £4.62 per hour

• NMW apprentice rate for those aged under 19 or in their first year of an apprenticeship will increase from £4.15 per hour to £4.30 per hour

Statutory Benefits

Statutory sick pay is expected to increase from £95.85 to £96.35 per week.  Statutory maternity, paternity, shared parental and adoption pay increases from £151.20 to £151.97 per week. These increases usually occurs on the first Sunday of April.

Tribunal Compensation

The annual Employment Tribunal award limit changes will take effect for any dismissals from 6 April 2021.  The new limits are likely to be announced during March.

Guidelines for Injury to Feelings Awards

The Court of Appeal previously set out guidance for quantifying awards for injury to feelings in discrimination cases, known as the Vento bands.  The annual update is usually announced in March and takes effect for any dismissals from 6 April 2021.

Gender Pay Gap Reporting

Gender pay gap reporting was suspended in 2020 and it has recently been announced that enforcement of the reporting requirement will be suspended again this year for a period of 6 months.  While employers are still encouraged to meet the 30 March (public sector) and 4 April (larger private and voluntary organisations) deadlines, the Equality and Human Rights Commission have confirmed that no enforcement action will be taken until 5 October 2021 and affected employers essentially have until that date to comply.  Depending on whether you use the figures based on the 50% of employers who did report in April 2020 or the ONS statistics (which are based on more recent data and a broader selection of businesses) the gender pay gap either increased by nearly 1% last year or decreased by 1.6%.  Calculations will be complicated this year by furlough (the snapshot date for reporting coming roughly 2 weeks after lockdown began).

IR35

Changes to IR35 in the private sector - also delayed by 12 months as a consequence of Covid-19 - will come into force on 6 April 2021.  The rules shift responsibility for determining the status of a contractor, and liability for deducting tax and NIC, if IR35 applies, to the hiring organisation.

Post-Employment Notice Pay

Changes to the calculation of Post-Employment Notice Pay will also take effect from 6 April 2021.  The existing formula had the unintended consequence of having more or less favourable outcomes depending on when in the year employment terminated.  The change will result in a consistent calculation.  A further change will mean the tax treatment of PENP, for employees who are not resident in the UK, will be aligned with the treatment of all UK residents.  However, this applies only to employees who physically perform their duties in the UK.