April 2021 changes – what employers need to do
Assess whether IR35 applies to your contractors and review their contracts
Reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021 after being delayed by a year due to the COVID-19 pandemic. Rules are aimed at reducing tax avoidance for contractors employed via personal service companies.
Under the new rules, it is the responsibility of the employer or organisation engaging the contractor to determine a contractor’s employment status and assess whether 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.
Once an individual’s classification has been determined, the employer/organisation must provide a status determination statement to the individual and to the party with which the organisation has contracted with reasons for such determination. Employers should review their contracts and put in place the necessary procedures to ensure compliance.
Ensure your workers are paid the National Minimum Wage
All employers should ensure that workers are being paid at least the National Minimum Wage that applies to their age
The National Living Wage increases to £8.91 per hour on 1 April 2021. In addition, the age threshold for the National Living Wage is decreased from 25 and over so that it applies to 23- and 24-year-old workers from 1 April 2021.
The National Minimum Wage also increases on 1 April 2021, with hourly rates rising to £8.36 for workers aged 21 and 22, to £6.56 for workers aged 18 to 20 and to £4.62 for workers aged 16 and 17.
Update your statutory redundancy pay calculations
New limits on employment statutory redundancy pay come into force on 6 April 2021. Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount, which increases to £544 from 6 April 2021.
Increase statutory family-related pay and statutory sick pay
The weekly rate of 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 increases to £96.35 from 6 April 2021.
Relevant policies should be reviewed and updated.
General Data Protection Regulation (GDPR)
Data relating to tests and vaccines are special category under GDPR and employers must comply with their GDPR obligations relating to the processing of such data. The ICO guidance states that employers are likely to be able to rely. on their health and safety duties as a ground for processing special category data in these circumstances provided that limited data is collected, the collection and processing of the data is necessary and proportionate, and the data is kept secure.
(Partner/Head of Employment)
For further advice of any of the above changes or any employment related matters, please contact Claire Cole on 01905 726600 or email Claire.email@example.com
The contents of this article are for purposes of general awareness only. They do not purport to constitute legal or professional advice. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.