By Paul Sleath, CEO at PEO Worldwide
This year, COVID regulations mean employers around the world have had to grapple with a rapidly evolving legal landscape. And 2021 looks set to continue throwing fresh challenges at organisations with plenty of changes ahead for the world of global employment.
Let’s take a look at some of the new obligations employers in the UK will face in the months ahead.
There are two big words on every UK employer’s lips at the moment: Brexit and coronavirus. (Okay, maybe three words. It’s nearly Christmas after all.)
Although Brexit is hardly news to anyone by now, the transition period will end on 31 December 2020 — meaning things are about to get VERY real. Brexit could impact your international business growth in several ways, but there’s one change to be particularly wary of as we head into the new year…
As of 1 January 2021, there’ll be a new points-based immigration system in place. There are several changes to the former system. For example, the gross basic salary must be £25,600 or over, the skill level must be equivalent to A-levels, and applicants must have an intermediate English communication ability. As such, you should take the time to understand how the new system will affect your recruitment and whether or not you’ll need to apply for a sponsor licence.
EEA nationals arriving in the UK from 1 January will also need to comply with the same visa requirements as other non-UK nationals.
All UK employers are required by law to check their employees have the right to work in the UK. The government takes illegal immigration extremely seriously and has extensive powers to pursue and investigate any suspected breach by employers. Penalties for non-compliance are also severe, meaning there’s a very real risk that even just one incidence of non-compliance could be disastrous for your company.
Coronavirus job schemes
The pandemic will continue to present challenges for employers and their HR teams, including how to manage working from home, redundancies and the health and safety of staff.
In November, the Coronavirus Job Retention Scheme (CJRS), which was due to close 31 October 2020, was extended until 31 March 2021. As before, the government will pay 80% of furloughed employees’ wages, either for full or part-time hours, subject to a monthly cap of £2,500. The government will review the terms of the scheme in January and decide if employers should be required to contribute a proportion of employees’ wages.
The Job Support Scheme (JSS), which was due to start 1 November, has also been postponed until the CJRS ends. It’s designed to top up the pay of employees working fewer hours due to decreased demand.
In light of this, employers will need to assess how any changes to the scheme will impact their business and put plans in place for when the scheme finishes.
On 1 April 2021, the National Living Wage (NLW) rises to £8.91. The age at which workers become entitled to the NLW will also drop by two years to 23.
The new National Minimum Wage (NMW) will apply from this date, too, although the rate has not yet been announced. However, it’s likely the increase will be significantly less than in previous years due to the economic impact of the pandemic.
As an employer, you should look out for announcements on the new rates and be prepared to make adjustments where necessary to ensure compliance with the new requirements.
Up until now, the off-payroll working rules (IR35), which aim to reduce tax avoidance for contractors employed via personal service companies, have only applied to the public sector.
The extension of the rules to the private sector was planned to take effect from 6 April 2020 but, as with so many other things this year, was delayed due to COVID. However, from 6 April 2021, private sector organisations engaging contractors will also be responsible for determining their employment status and assessing whether or not IR35 applies.
This responsibility applies to all private-sector employers that in a tax year have more than 50 employees, an annual turnover of over £10.2 million or a balance sheet worth over £5.1 million. So, start reviewing your contracts now and put in place any necessary procedures to ensure compliance.
Currently, if an employee is at risk of redundancy while on maternity, adoption or shared parental leave, they have the right to be offered any suitable alternative vacancy that’s available.
In December 2019, an Employment Bill was announced which proposed to extend this protection to pregnant employees (once they have told their employer of their pregnancy), employees returning from maternity or adoption leave within the previous six months and parents returning from shared parental leave.
Although no concrete date has yet been set for these changes to be brought into force, it’s an important change to be aware of ready for when the times comes.
There’s nothing worse than being on the wrong side of the law. So, if you’re unsure about any of these new regulations or how best to proceed, it’s well worth engaging a Professional Employer Organisation (PEO).