Employment law: What changes should we expect in 2021 following the pandemic?

Employment law changes following the pandemic and changes expected in 2021

As the New Year rolls around, the government’s Coronavirus Job Retention Scheme (CJRS) remains in force, with the possibility of the Job Support Scheme to follow on. Combined with other planned legislative changes, employers will have plenty of new rules in employment law to deal with in 2021.

Other major new rules include a change to the IR35 rules in respect of work done through a personal service company and a change to the immigration system which will require European workers to obtain a points-based visa and those sponsoring them to obtain a licence.

The extended furlough scheme

The chancellor’s furlough scheme, or CJRS, is due to last until 30 April 2021. It pays a government contribution of up to 80 per cent of the value of hours not worked where an employee’s place of work is closed or because of a reduced need.

The government contribution is capped at £2,500 per month and the employer is required to pay National Insurance and pension contributions, but nothing towards the cost of the hours not worked unless they choose to.

An employer can make a claim for any employee who was on the payroll as of 3 October 2020, even if the CJRS had not previously been used. The scheme is flexible and claims can be made for short periods of time, provided they are for at least seven days, as well as for part-time or shift workers.

An employer can furlough any worker who is shielding or who has a family member who is shielding.

Claims should be made to HM Revenue & Customs by the 14th of the month following the month for which the claim is being made.

The Job Support Scheme and Job Retention Bonus are currently on hold, although it is expected that these will be introduced following the ending of the CJRS.

Read more about the effects of Covid-19 on employment across the UK, here.

Employers wishing to take on non-UK nationals, including those from other European countries, will need a sponsor licence. A new ‘skilled worker’ route will replace the current Tier 2 immigration route for employment law.

Once an employer has a sponsor licence, they will be able to offer employment to skilled workers. If the job is at the right skill level, has the requisite salary and the prospective employee satisfies the requirement to speak English to a certain standard, then the worker can apply for a points-based visa to enter the country to work.

The new rules have a lower skill requirement than the previous Tier 2 system as well as a lower minimum salary, down from £30,000 to £25,600. The resident labour market test will be dropped and the annual cap on the number of visas issued is to be suspended.

It is likely that it will be possible for a worker to apply to extend their visa an unlimited amount of times, should they not qualify for indefinite leave to remain, for example, if they do not spend long enough in the UK. Before, there was a six-year limit on Tier 2 visa duration.

The skilled worker route opened on 1 December 2020. An application can be made to the Home Office for a sponsor licence and it is advisable to do this without delay, particularly as there may be a large number of applications in late 2020 and early 2021.

Before you apply for the licence, you should put the right legal and HR framework in place to manage the process. This includes assigning three individuals to the key posts of authorising officer, key contact and day-to-day administrator.

At Lincoln & Rowe we can help you ensure your business is ready to take on skilled workers and we can put together your sponsor licence application to ensure all of the accompanying documentation is included and that you have the best possible chance of success.

We can also take you through the full requirements for a skilled worker so that they can be secure in their application for a points-based visa.

For more information on employment law and how we can help at Lincoln & Rowe, click here. 

Changes to the IR35 rules

Larger businesses in the private sector that use individual contractors will need to determine the status of individuals whose services they are using. Where the contractor works through a personal service company or other intermediaries, a business will be responsible for deciding whether the individual has employee status. If so, the end-user will be liable for paying tax and national insurance.

This will only affect businesses with more than 50 employees, with a net turnover of over £1.2 million and in excess of £5.1 million on their balance sheet.

The new Employment Bill

A new Employment Bill is expected in 2021. The anticipated measures include the following:

  • A new single labour market enforcement body to inform vulnerable workers of their rights and help businesses with compliance;
  • The requirement that all tips and service charges be passed on to workers;
  • The right to request a more stable contract after 26 weeks of employment. This is aimed at those working variable and unpredictable hours, such as under a zero-hours contract;
  • The extension of redundancy protection for pregnant employees from the date they notify an employer of their pregnancy until six months after the birth;
  • Extra leave for parents with a child in neonatal care, up to a maximum of 12 weeks;
  • The entitlement of one week’s unpaid leave for carers.

Legal expertise for employers in 2021

Employment law is constantly changing and in the current climate, this is happening faster than ever. At Lincoln & Rowe we can give you the help and guidance you need to comply with new legislation and to ensure that you have a robust legal framework in place for all of your employer responsibilities.

Staying abreast of change and putting the right structures in place will not only ensure that you are compliant with new rules and regulations, but it will also help you avoid costly disputes with employee

Get in touch with us

We have wide-ranging experience in litigation and all matters of employment law, and were named as the ‘Commercial Disputes Specialists of the Year” in the Corporate Livewire Innovation & Excellence Awards 2020 as well as ‘Boutique Litigation Law Firm of the Year’ in both the 2019 and 2020 Global Awards by ACQ5

If you would like to talk to one of our expert legal team about any queries you may have regarding employment, redundancy, furlough scheme or changes in law in 2021, contact the author, Dipesh Dosani, or call the team today on 020 3968 6030 and we’ll be happy to help.

The above information is for general guidance on your rights and responsibilities and is not legal advice. If you need more details on your rights or legal advice about what action to take, please contact a legal advisor.

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Dipesh Dosani Partner
Dipesh advises clients on a wide range of commercial disputes including breach of contract, directors’ disputes, shareholder remedies, partnership issues, professional negligence and intellectual property. He is also able to provide clients with advice on all aspects of insolvency as well as investigations including misfeasance, undervalue transactions, preferences, transactions to defraud creditors and wrongful trading.


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