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2021 employment law changes: an overview for employers

View profile for James Hodgson
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Give yourself a head start in 2021 by planning ahead for these forthcoming changes to employment law.


The Coronavirus Job Retention Scheme is open until the end of April 2021. As an employer, you only need to contribute National Insurance and pension payments when accessing the scheme this year. Now is a good time to consider what you will do when the scheme ends.


Whilst the UK is no longer in the EU, not all Brexit deadlines were set for 1st January. The EU Settlement Scheme remains open for applications for EU nationals until 30th June 2021. Employees are responsible for applying but why not remind staff of the deadline? Don’t forget that employers are responsible for ensuring right to work checks are carried out for all new staff.

Note: the new points-based immigration system came into force on 1st January and employers must abide by the new rules when hiring staff from overseas.


IR35 was delayed due to coronavirus and the new rules will come into force on 6 April 2021. There is an exemption for employers with less than 50 employees who meet additional turnover criteria. If you engage contractors after 6 April you will be responsible for identifying their employment status for tax purposes and you may need to make National Insurance contributions. By carrying out a workforce audit you’ll be able to assess how the new IR35 rules could affect your payroll budget and contracts.

National living wage

In April 2021 the full national living wage will become available to 23- and 24-year-olds (previously only available to those aged 25 and over). The rate will increase as follows:

  • £8.91 per hour for people aged 23 and over
  • £8.36 per hour for people aged 21 and 22 years old
  • £6.56 per hour for people aged 18 to 20 years old
  • £4.62 per hour for 16 and 17year-olds
  • £4.30 per hour for apprentices

The Employment Bill

Whilst dates are yet to be confirmed, in 2021 the Government may give an update on a number of other employment issues which come under the Employment Bill. These include:

  • A possible extension to redundancy protection for pregnant employees
  • A code of practice relating to tips in the hospitality sector
  • The right to one week’s unpaid leave for carers
  • The right for those on zero-hour contracts to request more predictable working hours
  • Extended leave for parents with children in neonatal care

For expert advice on all aspects of employment law including settlements agreementsunfair dismissalredundancygrievance and disciplinary procedureswrongful dismissalconstructive dismissal and discrimination claims, please contact James Hodgson or Maureen Cawthorn at our Halifax office on 01422 339600.