5 employment law changes coming in April - what staff and companies need to know
Numerous employment laws changes are coming into effect in April, including a change in statutory sick pay and an increase in the national minimum wage.
Here’s everything you need to know, including changes to statutory sick pay and minimum wage.
Employment tribunal compensation awards and rates
Employment tribunal compensation rates will increase from 6 April 2021. As of this date, the maximum week’s pay for redundancy pay purposes will increase from £538 to £544, explains Kate Palmer, HR Advice Director at Peninsula.
However, statutory guarantee pay will be staying at £30.
Ms Palmer said: “This is important for the purposes of tribunal claims because it means that the maximum statutory redundancy pay, as well as unfair dismissal basic award pay, will both now be £16,320.
“The unfair dismissal compensatory award, which is set to compensate the claimant for past and future lost attributed to the dismissal, is a maximum of 52 weeks’ pay, subject to a new maximum of £89,493.”.
The maximum amount of additional award for unfair dismissal, which is set to compensate claimants when employers fail to adhere to a tribunal instruction in order to re-engage them, will rise to £28,288, taking into account average weekly earnings.
Statutory Sick Pay
Employers are liable for the payment of statutory sick pay (SSP) to eligible employees. The current rate is £95.85 per week, but this is set to rise to £96.35 from 6 April 2021.
The lower earnings limit for eligibility to statutory payments will stay the same at £120 per week.
The weekly rates of statutory family leave - which includes maternity and paternity leave - will increase by 77p per week on 4 April 2021, rising from £151.20 per week to £151.97 per week.
Minimum wage rates
From 1 April 2021, national minimum wage rates are also set to increase.
The new hourly rates are as follows:
· Workers aged 23 and over (National Living Wage) - £8.91· Workers aged 21-22 - £8.36· Development rates for workers aged 18–20 - £6.56· Young workers rate for workers aged 16–17 - £4.62· Apprentices under 19, or over 19 and in first year of the apprenticeship - £4.30.
The National Living Wage (NLW) threshold is being lowered to include all those aged 23 and over. Currently, the NLW is payable only to people who are aged 25 and over.
The IR35 legislation - which aims to ensure that contractors are paying the appropriate amount of tax - is also changing for some private sector businesses.
Currently, most contractors are required to determine their own status as an employee or contractor.
However, from 6 April 2021 this liability will pass to medium and large-sector clients.
“Smaller clients will be exempt from this obligation, and the contractor remains liable for determining their own tax status,” adds Ms Palmer.