Six Crucial Employment Law Changes in 2021

There is no doubt that 2020 has been a very busy year.

Now, with 2021 just around the corner, let’s take a look ahead to some key developments to be aware of.

Employment law changes - 2021

1. New immigration law

From 1 January, free movement of persons is to end, and with it comes a whole new set of immigration laws. All foreign nationals will now need to seek to enter the UK in the same way, with many expected to use the ‘Skilled Worker Route’. To be able to work in the UK legally under the ‘Skilled Worker Route’, foreign nationals have to meet specified criteria in order to earn at least 70 points. Crucially, this involves being offered a job from an approved sponsor.

If a company intends to take on foreign workers from next year, it is essential that they apply for a license as soon as is possible.

2. The end of the furlough scheme

It’s likely that the furlough scheme will finally come to end as coronavirus restrictions ease. Currently, this is currently expected to happen on 30 April 2021.

Employers should start to plan the steps they are going to take when they no longer have this support from the government. If you’re considering redundancies, remember to assess alternative options.

3. The return of gender pay gap reporting

The compulsory production of gender pay gap reports was paused due to COVID-19. This is expected to return next year. Organisations with at least 250 employees by the relevant snapshot date are eligible to produce a report.

For public sector companies, this was 30 March 2020, for private sector companies this was 5 April 2020. If staff were furloughed on these dates, and therefore earning 80% of their wages, they will not need to be included in the report.

This means that the figures companies end up publishing may not be fully representative of the actual situation, so they should ensure this is clearly outlined in accompanied narrative.

4. New IR35 requirements

From April 2021, eligible large and medium sized organisations engaging contractors through intermediary companies will also be responsible for assessing the employment status of those contractors. Under the new rules, where workers are engaged through their own companies, responsibility to apply IR35, and to pay any associated tax and National Insurance contributions (NICs), will fall to the private company, agency or other third party paying the worker’s company.

These new rules were expected in April 2020 but were delayed due to the coronavirus pandemic.

5. More companies to produce Modern Slavery statements

There are plans to require an increase the number of companies that need to produce a Modern Slavery statement. In this statement, you’ll need to set out the steps you’re taking to combat modern slavery. These steps must address your own operations and your supply chains.

Now, public sector organisations with a budget of at least £36 million will be required to publish a statement. Statements will also be required to cover specific topics and be published on the government registry.

It has not been confirmed when the new requirements will come into force, but the registry is expected to be launched in ‘early 2021’.

6. Extended redundancy protection for pregnant employees

Currently, those on maternity leave who are at risk of redundancy must be offered suitable alternative roles in advance of others. This protection ends once the employee returns to work. Future changes will mean that this protection starts from the date the employee informs her employers that she is pregnant. It doesn’t matter whether the employee informs you verbally or in writing. This protection will last for a further six-month period once the employee returns to work.

The extended protection will also be available to those on adoption leave and shared parental leave. It is currently not confirmed when this will come into force.

Expert support

If you're concerned about any of the upcoming changes and need HR advice, speak to an employment law expert on 01455 858 132.