If you’re in HR or you manage people, you will know that April brings changes to statutory payments, including national minimum wage.
And this is on top of continuing to deal with the impact of Covid-19. Nevertheless, it is essential that you and your organisation comply with the usual list of employment law changes, including national minimum wage.
As well as the annual changes to statutory payments, you also need to check your IR35 obligations. Given the ongoing pandemic, the government decided to postpone these tax reforms in 2020. This year, however, you will need to get this right.
So, here are the 5 things you need to be on top of this spring.
Pay the national minimum wage
You have a legal duty to ensure that you pay staff at least the national minimum wage that applies to them dependent on their age or worker status, e.g., apprentice.
The national living wage increases to £8.91 per hour on 1 April 2021. Notable for 2021 is the age threshold for 23- and 24-year-old workers for whom national living wage will now apply. Previously, national living wage only applied to those over 25.
For workers aged 21 and 22, the national minimum wage will increase to £8.36 per hour. For those aged 18 to 20, it’s £6.56 per hour; and for anyone aged 16 and 17, it’s £4.62 per hour.
Beyond minimum wage – update your statutory redundancy pay calculations
Employers making redundancies must pay those with 2+ years service based on their weekly pay, length of service and age. The weekly pay is subject to a maximum amount, which is £544 from 6 April 2021.
You also need to make sure that you update calculations if you are currently going through a consultation process. And, any policies or documents that refer to the previous rate will also need to be updated.
Increase statutory family-related pay and sick pay
The weekly rate for statutory maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97 from 4 April 2021.
The weekly rate of statutory sick pay will increase to £96.35 from 6 April 2021.
As an employer, it is your responsibility to ensure that your staff are paid the correct statutory minimum rates. You will also need to review your organisational policies and documents that refer to rates, such as maternity policy and absence management policy, to make sure they are updated to reflect the new rates.
Review your IR35 commitments
This one is top of the priority list if you haven’t started to think about it yet.
Changes to the IR35 rules on ‘off-payroll’ working in the private sector will come into force on 6 April 2021. The goal is to reduce contractor tax avoidance for those employed by personal services companies.
The new rules mean that the organisation working with the contractor is now responsible for finding out their employment status. Where IR35 applies, if you pay a contractor then you are their employer and you are responsible for paying their tax and national insurance contributions.
Once you have identified where your contractors sit, you will need to provide a ‘status determination statement’ to the individual and also to the party that the organisation has contracted. In order that the statement is valid, you must also provide reasons for the determination.
As an employer, you need to review contracts and put in place procedures to make sure you are compliant.
For larger organisations – report on gender pay gap if you can
If you have more than 250 employees, you will know that there is a requirement to publish your gender pay gap report in April every year. The deadline is usually 4 April for private and voluntary sector employers, and 30 March for public sector employers.
Due to the ongoing pandemic, the Equality and Human Rights Commission (EHRC) has stated that they will allow a delay in the reporting duty of organisations for six months. This means that you have until October 2021 to meet your gender pay gap reporting requirements.
As an employer, you are still required to report your figures. But you now have an extra six months to do so before enforcement action will begin. The EHRC still encourages organisations to report their gender pay gap data before October 2021 if they can. Here at Nectar HR, we would agree for the most part. Although the rules may have been relaxed, a delay in reporting this key data may have an adverse effect on your organisation’s reputation – in relation to current and future employees, as well as customers and competitors.
And finally, it’s also worth noting that the maximum compensatory award for unfair dismissal at tribunal increases to £89,493 for dismissals that take place on or after 6 April 2021 – so it’s worth getting it right now.
Please get in touch if you would like to discuss – without obligation – your responsibilities as an employer from April 2021. It would be our pleasure to guide you through these changes, whether it’s a brief conversation, providing a letter template or two, or even managing the whole process.
Want all of these figures to hand? Download our handy infographic!
In the meantime, find out more about our HR Consultancy Birmingham services. And give us a shout, we would love to hear from you!