There is no doubt that 2020 has been a year of unprecedented change for employment legislation as a result of the global Coronavirus pandemic.
As we enter the final months of the year, we took the time to look back at some of the employment law amendments that came into effect earlier in 2020 as well as consider changes we expect to see in 2021.
One of the most significant change we witnessed this year is the introduction of the Coronavirus Job Retention Scheme and all subsequent adaptations throughout the year. In light of recent announcements, we thought it would be useful to summarise the scheme as of 11th November 2020.
The Coronavirus Job Retention Scheme (CJRS)
The CJRS was announced in March 2020 at the start of the Coronavirus pandemic and was expected to end on 31 October 2020. However, the Chancellor has recently confirmed that CJRS will be extended and offered nationwide until March 2021 and reviewed again in January 2021. Therefore, all businesses will still be able to implement the scheme, providing they meet the required eligibility criteria which has not been amended. The extension of the scheme also means that the cost for employers will only be to cover NI and pension contributions during this stage of the scheme.
Please note: As CJRS has now been extended, the previously announced Job Retention Bonus, which was due to be rolled out in January 2021, will no longer be available.
A reminder of key CJRS stats:
- The Government will pay 80% of an employee’s wages up to a cap of £2,500 for hours not worked
- Employers can top up wages to 100% if they choose
- Flexible Furlough will be allowed during this period so employees can be furloughed part time only and they will receive 100% of their pay for hours worked, which will be covered by the employer
- Employers with a UK bank account and UK PAYE scheme can claim the grant whether or not they have previously used the Job Retention Scheme
- Employees must have been on an employer’s PAYE payroll by 23:59 on 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020
- There must be a written agreement with the employee implementing the changes available for inspection by HMRC which covers at least 7 consecutive days
Key Employment Law Changes from 6 April 2020
Parental Bereavement Leave & Pay
The Parental Bereavement Leave and Pay Act 2018 gives all employed parents the right to 2 weeks’ paid leave if their child aged under 18 dies, or if they have a stillbirth at 24 weeks or later.
Written Terms (‘Written Statement of Employment Particulars’)
Workers now have the same rights as employees to written terms (a ‘written statement of employment particulars’) from their employer.
Employers must provide their workers and employees with their Written Statement of Employment Particulars on or before their first day of employment, no matter how long they are employed for.
In addition to the information which must already be included in a Written Statement of Employment Particulars at present, the following additional information must be provided:
- The hours and days of the week the worker /employee is required to work, whether they may be varied and how;
- Entitlements to any paid leave (for example, sick leave, compassionate leave, maternity and paternity leave etc.);
- Any other benefits not covered elsewhere in the Written Statement;
- Details of any probationary period and the terms of the probationary period;
- Details of any mandatory training provided by the employer and the terms of the training e.g. if the employee will be required to pay for any mandatory training.
Agency Workers’ Rights
The Swedish Derogation, referred to as ‘pay between assignments’ contracts, was abolished from 6 April 2020, and as a result all agency workers are now entitled to the same rate of pay as their permanent counterparts after 12 weeks.
All agency workers are entitled to a key information document that clearly sets out the type of contract they will have and the pay they will receive.
Changes to Holiday Pay Calculations
From 6 April 2020, the period used to calculate a week’s pay for holiday pay purposes increases from the previous 12 weeks of work to the previous 52 weeks.
Future Employment Law Changes for 2021
1 January 2021
Immigration Law Changes
Following the end of the Post Brexit transition period on 31 December 2020, new UK immigration rules will come into effect which will prevent EU free movement into the UK for non-UK residents.
From 1 January 2021 all EU nationals who enter the UK after 1 January 2021, and have not previously lived in the UK, will require a valid visa to live, work and study in the UK. There will be a new Points Based System in place from 1 January 2021 which means that employers who wish to employ EU Nationals will have to apply for a Sponsorship Licence, if they have not already got one, and EU Nationals will need to be sponsored in the same way that non-EU Nationals are at present.
As a result of these changes, the EU Settlement Scheme will close to new entrants after 1 January 2021. However, those already in the UK can continue to apply for Settled or Pre-Settled status until 30June 2021. Employers do not need to check whether current employees who are EU Nationals have Settled or Pre-settled status, this is to avoid any potential discrimination issues. However, employers may wish to raise awareness to EU Nationals to apply for Settled or Pre-Settled Status, prior to the scheme closing 30 June 2021.
The Right to Work rules and checks of current EU National workers, i.e. EU passport, are still valid until the 30 June 2021, after this date the new Points Based System must be utilised.
6 April 2021
Extension to IR35 Reforms for the Private Sector
Originally due to take effect from 6 April 2020 but delayed to 6 April 202, because of the Coronavirus pandemic, changes to IR35 rules will affect medium and large businesses within the private sector that use individual contractors. These changes will largely mirror changes that took effect in the public sector in 2017 but small businesses will not be affected. To be eligible, an organisation must meet at least two of the below criteria:
- Have over 50 employees
- Have a net turnover in excess of £10.2m
- Have over £5.1m on their balance sheet
The IR35 rules prevent contractors working through Personal Service Companies (PCS), and performing similar roles to employees, paying less tax and NICs than if they were permanently employed by the client organisation. When the rules were introduced in 2000, contractors themselves assessed whether IR35 applied to them, however, from 6 April 2021, this responsibility applies to all eligible private sector employers. Therefore, it is essential that medium and large businesses carry out an assessment to determine whether the new rules under IR35 apply to their independent contractors and review their contracts and pay arrangements.
With so many employment law changes in the last 12-months and beyond, should you require any further information or would like to discuss specific employment law challenges and how they might affect your business, please do not hesitate to contact our team today.