Employment Law: What Changed in April 2021? | April 2021

Employment Law: What Changed in April 2021? | April 2021

There are key changes in employment law at the start of April every year and in this month's update, we bring all of this year’s changes into one place for you.

So, what changed in April 2021?

National Minimum Wage

The national minimum wage is set as an hourly rate. The rates payable are as follows:

  • For workers aged 23 or over, the rate is £8.91 per hour (the national living wage).
  • For workers aged at least 21 but under 23, the rate is £8.36 per hour.
  • For workers aged at least 18 but under 21, the rate is £6.56 per hour.
  • For workers aged under 18 who are no longer of compulsory school age, with apprentices excepted, the rate is £4.62 per hour.
  • For apprentices aged under 19 and apprentices aged 19 or over but in the first year of their apprenticeship, the rate is £4.30 per hour.
  • Prior to 1 April 2021, the national living wage rate applied only to workers aged 25 or over. From 1 April 2021, workers aged 23 or over qualify for the national living wage rate (£8.91 per hour).

IR35 in the Private Sector                                                          

IR35 rules on off-payroll working in the private sector came into force on 6 April 2021. The purpose of these rules are aimed at reducing tax avoidance for contractors employed via Personal Service Companies (PSC) which are limited companies set up by a contractor to provide their services to clients.

Under these new rules, the organisation engaging the contractor is responsible for determining their employment status and assessing whether or not IR35 applies. If IR35 does apply, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.

Gender Pay Gap Reporting

Employers with 250 or more employees are normally required to publish their gender pay gap report by April. The deadline for private-sector and voluntary-sector employers is normally 4th April, while for public-sector employers it is 30 March. However, due to Covid-19, all employers now have until 5th October 2021 to report their gender pay gap information.

Increase Statutory Family-Related Pay and SSP

The weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increased to £151.97 from 4 April 2021.

The weekly rate of statutory sick pay increased to £96.35 from 6 April 2021.

New Compensation Limits for 2021/2022

The new compensation limits came into effect on 6th April 2021 and are as follows:

  • Maximum limit for one week’s pay when calculating unfair dismissal basic awards and statutory redundancy payments increases to £544 (from £538)
  • Maximum compensation limit for unfair dismissal increases to £89,493 (from £88,519)

Our recommendations:

It is important to review your HR policies and practices, to ensure that these changes and updates are fully incorporated. If you have any HR issues and would like to talk them through with our team, please contact us.


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