April Employment Law Changes – 6 Key Tasks

1 – Get ready for IR35 - review your contracts in the private sector 

After being delayed by a year due to the pandemic, reforms to the IR35 rules on off-payroll working in the private sector come into force on the 6^th April 2021. The rules are aimed at reducing tax avoidance for contractors employed via personal service companies.  

Under the new rules, the company engaging the contractor is responsible for determining their employment status and assessing whether IR35 applies. The company that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes if IR35 does apply.  

Once the classification of an individual has been determined by the company, it must provide a status determination statement to the individual and to the part with which the organisation has contracted. The client must also provide reasons for the determination for the statement to be valid.  

To ensure full compliance, employers should review their contracts and put in place the necessary procedures.  

2 – Workers must be paid the national minimum wage 

Companies should familiarise themselves with the changes to minimum wage happening from 1^st April 2021 to ensure workers are paid the correct amount that applies to them.  

The national living wage (the highest band of the national minimum wage) increases to £8.91 per hour on 1^st April 2021.  

The age threshold for the national living wage will change to include 23-and-24-year-old workers from 1^st April 2021. Previously, the national living wage was available only to those aged 25 and over.  

Other national minimum wage rates also increase on 1^st 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. 

For more information about the changes to minimum wage, view our blog here.

3 – Statutory redundancy pay calculations must be updated 

Coming into force on the 6^th April 2021 are new limits on employment statutory redundancy pay. 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 the maximum amount. This amount is £544 from 6^th April 2021.  

Companies should measure that calculations for statutory redundancy payments are made based on this maximum amount for redundancy dismissals on or after 6^th April 2021.  

4 – Statutory family-related pay and statutory sick pay must be increased. 

From the 6^th April 2021, the weekly rate of statutory sick pay increases to £96.35.  

Make sure that staff on maternity leave, paternity leave, adoption leave, shared parental leave, parental bereavement leave, and sick leave are paid these statutory minimum rates.  

Reviews to policies and documents that mention the rates, such as their maternity policies and sickness absence procedures will also need to be amended.  

5 – If you can, report your organisation’s gender pay gap.  

Normally, employers with 250+ employees are required to publish their gender pay gap report by April. The deadline for private-sector and voluntary-sector employers is normally 4^th April, while for public-sector employers it is 30^th March. 

However, because of the Coronavirus pandemic, the Equality and Human Rights Commission (EHRC) has said that enforcement of the gender pay gap reporting duty for the 2020/2021 reporting year has been delayed by six months and does not begin until 5^th October 2021. The EHRC still encourages employers to report their data before October 2021, where possible.