Posted on 4th May 2021
Category: NewsApril 2021 has seen
several material changes in employment law rates and rules.
Increase in National Living Wage (NLW) and National Minimum Wage (NMW)
The NLW minimum age has been reduced from 25 to 23, meaning that those in the
23-24 age bracket will see an increase in their wages of approximately 9%.
Whilst this may be significant for those in this small age bracket, for the
majority the increase is much more modest. As of 6 April 2021, the NLW is £8.91
per hour, an increase of just 19p from the previous year. The figures for the
NMW relevant to each age bracket are listed below:
| Age | NMW rate from 6 April 2021 | Increase from last year |
| 21-22 | £8.36 | 2% (from £8.20) |
| 18-20 | £6.56 | 1.7% (from £6.45) |
| 16-17 | £4.62 | 1.5% (from £4.55) |
| Apprentice Rate | £4.30 | 3.6% (from £4.15) |
IR35
The previously delayed off-payroll rules have finally been implemented, meaning that private companies (other than those qualifying as ‘small’) will now have to ensure that they follow the IR35 rules. These rules, which have applied to the public sector since April 2017, mean that the burden now shifts to the hiring company in determining whether a contractor who is hired through an intermediary should be treated as a ‘worker’ for tax purposes.
In normal circumstances, where there is no intermediary the contractor would be deemed a worker and, for all intents and purposes, pay tax and national insurance at the usual rates. IR35 in effect circumvents the intermediary and imagines a hypothetical contract between the hirer and contractor, treating them as though the worker is directly employed for tax purposes. Once a hirer determines whether IR35 applies, a certificate is given to the contractor with reasons for the determination. This, in effect, decides what tax is paid and by who (albeit this can be subject to challenge by the contractor).
Increase in Employment Tribunal Awards- Unfair Dismissal
The basic award for unfair dismissal and statutory redundancy payments have both risen, with the cap on the maximum award now standing at £16,320. This is an increase of £180.00 from the previous year. The compensatory award for unfair dismissal is now the lower of: one full year’s gross basic salary; and £89,493.
News Article by Sirius Business Support