Ten things every employer should be ready for in 2021

Philip Sayers, solicitor in Coodes’ Employment team, looks ahead to 2021 and the key considerations for employers.

Blog updated 18 December 2020

There is no doubt that 2020 has been a very unusual year for businesses, with employers facing considerable new challenges. While we do not yet know what 2021 has in store, employers can prepare for likely trends and employment law changes. Many of these will feature in the Employment Bill, which is expected to be published sometime in 2021.

Here are ten of the most significant changes and potential developments for employers to plan for.

1. The continuation (and end) of the Coronavirus Job Retention Scheme

Millions of workers across the UK have been placed on furloughed leave since the Coronavirus Job Retention Scheme was launched in March 2020. With the scheme now extended until 30 April 2021 to help businesses through what could be a difficult winter, it is likely that many employers will continue to make use of the support.

The extension is good news for many employers, who can continue to place staff on full or part-time furlough. However, the Government recently announced that it was investigating cases of businesses fraudulently or accidently making incorrect claims. If you are making use of the scheme, it is vital to ensure you understand and comply with the legislation. Employers will also need to prepare for the end of the scheme in March, seeking legal advice if needed.

2. The new points-based immigration system

Following the end of the Brexit transition period, a new points-based immigration system will be introduced on 1 January 2021. Anyone European nationals will need to comply with the same visa requirements of other non-UK nationals to be allowed to work in the UK.

Employers seeking to recruit workers from outside the UK may need to consider a UK visa sponsor licence as well as encouraging existing employees to apply for settled or pre-settled status. European workers who were already working in the UK during the transition period have until 30 June 2021 to apply for settled status.

While employers should be aware of this change, here in the South West it is likely to be especially relevant to the agricultural sector, which relies heavily on seasonal migrant workers.

3. An increase to the national minimum wage

From 6 April 2021, the national minimum wage will increase to £8.91 an hour for workers aged 23 or over. Wages for younger workers and apprentices will also increase, to reflect the rising cost of living.

4. Potential extension to redundancy protection for pregnant employees

While an employer can make an employee who is pregnant or on maternity leave redundant, there are laws in place to prevent discrimination. This protection may be enhanced during 2021.

In 2019, the Government launched a consultation on extending redundancy protection for employees on maternity leave. This change, which is due to be part of the Good Work Plan, would mean the protection would continue for six months after the employee returns to work. The extended protection would cover all new parents, including those returning from adoption leave.

While we do not yet know if any of these changes will come into force in 2021, employers should be aware of the possibility and keep an eye on developments.

5. Reforms to IR35 rules

Larger businesses will be aware of changes to off-payroll working rules (IR35 rules), which were due to be launched in 2020. The Covid-19 pandemic delayed the implantation of the new rules, which are now set to come into force on 6 April 2021.

The rules only apply to businesses with more than 250 employees and will bring about changes to how organisations can engage contractors. If the IR35 rules are relevant to your business, you will need to seek professional advice, review your contracts and put procedures in place to ensure you comply.

6. New measures to protect workers on zero hours contracts

The element of the Good Work Plan which delivered, perhaps, the most eye-catching headlines when it was launched in 2019, was the call for workers on zero hours contracts to be given more stability. We are awaiting the Government’s response to its consultation on proposed legislative changes to flexible and zero hours contracts. Businesses that employ workers on zero hours contracts should keep an eye out for news in the coming months.

7. Preparing for future changes to neonatal leave

In March 2020, the Government confirmed it would introduce 12 weeks’ paid leave for parents of premature babies in neonatal care. This would be in addition to maternity and paternity leave. While not due to come into force until 2023, employers can look out for any detail on these future changes in the coming months.

8. New laws on the distribution of tips in the hospitality sector

Back in 2018, the Government announced that it would introduce new legislation, designed to give hospitality workers a fairer deal on the distribution of tips. The Government has stated it will produce a statutory code of practice to prevent employers taking tips from workers. Restaurants and other hospitality businesses may need to respond quickly if new measures are introduced in 2021.

9. Potential unpaid leave for carers

Earlier this year, the Government carried out a consultation on proposals to give employees with caring responsibilities the right to a week’s unpaid annual leave. There is no news yet on the proposals, but they are likely to be covered in the forthcoming Employment Bill.

10. Continued homeworking for many

While the roll-out of the Coronavirus vaccine has raised hopes that we may be able to return to some sort of normality by the middle of next year, it is likely that many people will continue to work from home. While this will partly be through necessity, to meet the ongoing restrictions, some may see it as a good long-term solution. After all, many businesses have enjoyed the financial benefits of having fewer staff on site and many employees appreciate the greater work-life balance homeworking can provide.

If some or all of your employees are working from home, ensure you are doing all you can to comply with employment law and best practice.

Whatever the coming year brings, ensure your staff handbooks, employee policies and contracts reflect any changes to legislation or working arrangements. We would be happy to review any of these documents and to support you in ensuring you remain compliant with employment law in 2021.

For more information or advice, please contact the Employment team at Coodes Solicitors: 0800 328 3282 or cde@coodes.co.uk