In this quarters update we look at recent legislation updates including the governments Job Retention Scheme (‘furlough’). Minimum wage and statutory payments, and IR35, along with recent changes to the immigration rules.
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Legislation Updates / Case Law
Job Retention Scheme extended to end of September 2021
The government have confirmed an extension to the current scheme until 30th September. However, there are some changes to be aware of:
- In July, the government will contribute 70% and employers will have to pay 10% for hours not worked;
- In August and September, the government will pay 60% and employers 20%.
- For periods starting on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods starting on or after 1 May 2021.
National Minimum Wage / National Living Wage
From April 2021, the rate of the National Living Wage will increase to £8.91 per hour and will be payable to more workers because the age threshold is being reduced to 23 (currently, only workers aged 25 and above qualify). The National Minimum Wage rates are also increasing for all age groups. Full details are shown below.
Age Rates
23 and over £8.91 (the ‘National Living Wage’).
21 to 22 £8.36
18 to 20 £6.56
Under 18 £4.62
Increased Statutory Payments
The following new rates will now apply:
- statutory redundancy pay weekly limit: £544
- statutory sick pay weekly rate: £96.35
- statutory maternity, paternity, adoption, shared parental and parental bereavement pay weekly rate: £151.97
Off-work payroll working rules (commonly known as IR35)
The rules apply to anyone who provides their services to another person or organisation through an intermediary, such as a personal service company (PSC). Currently, organisations in the private sector are able to engage contractors using personal service companies or other intermediaries without worrying too much about the contractor’s tax status because it’s the responsibility of the PSC to correctly determine the tax status of its contractors and account for any underpayment to HMRC. However, from 6th April 2021, the onus of deciding if an individual falls under IR35 will have to be decided by the client engaging them. And, if it decides the contractor is an employee for tax purposes, it becomes responsible for paying PAYE and National Insurance contributions. HMRC have an online tool ‘Check Employment Status for Tax’ to help organisations determine the tax status of contractors, but it’s not perfect. These rules will apply to any payment made on or after 6th April 2021, unless all the contractor’s labour was provided after that date. The rules don’t apply to small organisations that don’t meet at least two of the following criteria:
- Annual turnover of more than £10.2 million
- Balance sheet total of more than £5.1 million
- More than 50 (full-time equivalent) employees
If you are caught by the rules, you need to identify any service provider that you need to provide a status determination on.
Changes to the Immigration System
EEA (which includes EU countries and also Iceland, Liechtenstein and Norway) and Swiss nationals who arrived in the UK before the end of the transition period (31 December 2020) have until 30 June 2021 to apply for either settled or pre-settled status, which will give them the right to work in the UK. EEA and Swiss nationals entering the UK from 1 January 2021 will not be able to apply for settled or pre-settled status. They will require a visa to be able to work in the UK under the new immigration system which applies from 1 January 2021.
EEA nationals and Swiss nationals will usually be able to produce either a national passport or a national identity card and can continue to rely on these until 30 June 2021 to prove their right to work in the UK. EEA nationals. Employers will be able to rely on these documents as proof of their right to live and work in the UK until 30 June 2021 due to the 6-month grace period that remains in place from the end of the transition period following the UK’s departure from the EU.
For EEA nationals and Swiss nationals that were recruited prior to 30 June 2021, Government guidance states there is no requirement for employers to carry out any further right to work checks and employers may continue to rely on the existing right to work checks as evidence of their right to work in the UK for the duration of their employment. Until 30 June 2021 these individuals can prove their right to work in the following ways:
- EU, EEA or Swiss citizens can use their passport or national identity card;
- non-EU, EEA or Swiss citizen family members can use an immigration status document;
- EU, EEA and Swiss citizens and their family members can use the online right to work checking service.
If the individual uses the online checking service this will generate a share code. The employer must then use the employers’ online service to check their right to work using this share code.
Home Office guidance states that, as employers have a duty not to discriminate against EU, EEA or Swiss citizens, employers cannot require those individuals to provide details of their immigration status under the EU Settlement Scheme until after 30 June 2021. From 1 July 2021, in respect of any new recruitment from that date (this does not apply to existing EEA and Swiss employees employed before that date) employers will be under an obligation to check that all EEA and Swiss new recruits, as with other recruits from overseas, have a valid UK immigration status under the new immigration regime: a valid passport or national identity card will no longer be sufficient evidence to provide a statutory excuse.
Further information can be found at https://www.gov.uk/guidance/new-immigration-system-what-you-need-to-know
Training
Operational Managers are key to a Company’s success, and how they work with and manage their teams is an essential part of this. We provide the following training courses to help Managers deal with issues and people correctly to enhance your business.
- Managing Discipline & Grievance
- Influencing Styles and Persuasive Negotiating
- Managing Conflict
- Managing Performance
- Managing Attendance
All of our courses can be tailored to suit your exact needs and delivered at your premises if required.
More details on each of the training courses can be found on our website.
Partner Services
We have long-term partnerships with key providers which enables us to provide other recommended services to our clients covering:
- Legal Services;
- Financial Services;
- Health Insurance and Staff Healthcare Benefits;
- Health and Safety.
Visit our website to see full information on our partners and their services.