The start of the New Year has seen the UK enter a third lockdown to contain the spread of COVID-19. HR professionals are once again dealing with the challenges of managing a remote workforce, processing furlough claims and looking after employees’ mental wellbeing.
They will also be helping businesses plan strategically for the year ahead, and potentially make some tough decisions about the workforce in order to survive as the UK faces the worst recession on record.
However, it’s crucial they also keep on top of what is happening in employment law. There are a number of laws that HR professionals need to be aware of to ensure their organisation is prepared and compliant.
A new immigration system
The end of the Brexit transition period saw the new points-based immigration system apply to European Economic Area (EEA) nationals arriving in the UK. Since 1 January 2021, EEA nationals must comply with the same visa requirements as other non-UK nationals.
HR professionals need to understand how the new system will affect their recruitment plans and consider whether they need to apply for a sponsor licence. They should encourage their existing EEA employees to apply for settled or pre-settled status, if they have not already done so.
European nationals already in the UK before the end of the transition period have a grace period until 30 June 2021 to apply under the settlement scheme. Employers will need to understand the rules on right to work checks during this period.
Review contracts for IR35 in the private sector
Reforms to IR35 rules on off-payroll working in the private sector come into force on 6 April 2021. Their aim is to reduce tax avoidance for contractors employed via personal service companies.
Under the new rules, the organisation engaging the contractor is responsible for determining their employment status and assessing whether or not IR35 applies. If it does, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.
If they have not done so already, employers should be reviewing their contracts and putting in place the necessary procedures to ensure compliance.
A rise to the national minimum wage
The new national minimum wage rates apply from 1 April 2021.
For workers aged 23 or over, the rate will be £8.91 per hour (the national living wage). For workers aged 21 or 22, the rate will be £8.36 per hour.
At present the age from which employees are entitled to the national living wage (the highest rate) is 25, this will reduce to 23 from 1 April 2021.
Changes to the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme has been extended until 30 April 2021.
Employers can furlough employees from November 2020 even if they had not previously made use of the scheme. The scheme will cover 80% of furloughed employees’ wages (capped at £2,500 per month).
HR professionals need to keep up to date with any further changes to the scheme and assess how these might impact their business, as well as consider how they will respond to ongoing COVID-19 restrictions once the scheme ends.
New rules on publishing modern slavery statements
The Government has committed to making changes to the rules on publishing modern slavery and human trafficking statements. It will be mandatory for organisations to report on certain areas when publishing their statement. The duty to publish a statement will be extended to public-sector bodies with a budget of £36m or more. It is not yet known when the new rules will come into force, but the Government published guidance in January 2021ii, which includes best practice approaches to reporting.
Potential extension of protection for pregnant employees and new parents
The Government consulted in 2019 on extending redundancy protection for employees taking maternity leave and for other new parents. An Employment Bill was announced in the December 2019 Queen’s Speech, to include measures to extend redundancy protection to prevent pregnancy and maternity discrimination. However, no date has yet been set for these changes to be brought into force.
These are some of the main changes that HR professionals need to be aware of, but there will be other employment law developments that the Government has previously announced but not yet set out a timetable. These include:
- Measures to ensure that tips left for workers go to them in full;
- A new right for all workers to request a more predictable contract;
- An increase to the length of time required for continuity of employment to be broken.
While HR professionals are still focussed on the challenges imposed by the lockdown restrictions, it’s imperative that they keep an eye on changes to employments laws to stay compliant.