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Employment Law Update Blog – Monday 6th April

As you know most employment news at the moment is focused on the coronavirus pandemic but there are some other news items that you also need to be aware of. Some are as a result of coronavirus while others are scheduled changes that have gone ahead despite the current situation.

Postponement of IR35

Changes to the IR35 off-payroll working rules in the private sector have been delayed by 12 months in response to growing business uncertainty surrounding the pandemic.

The legislation, which would have made organisations responsible for determining whether a contractor carrying out work for them should be treated as an employee for tax purposes, was due to be introduced today but is now expected to take effect on 6 April 2021.

Chief secretary to the Treasury Steve Barclay announced last week that “This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals. This is a deferral and not a cancellation, and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.”

Postponement of Gender Pay Gap Reporting for 2019/2020

Due to the coronavirus outbreak, on 24th March the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) took the decision to suspend enforcement of the gender pay gap deadlines for this reporting year (2019/20). The decision means there will be no expectation on employers to report their data. In a joint statement, Minister for Women & Equalities, Liz Truss, and EHRC Chair, David Isaac, said: “We recognise that employers across the country are facing unprecedented uncertainty and pressure at this time. Because of this we feel it is only right to suspend enforcement of gender pay gap reporting this year.”

Pay rates increasing for certain claims

From today rates are going up for certain employment claims. A week’s pay, for the basic award and statutory redundancy purposes, will increase from £525 to £538 for all dismissals on that take place on or after today, Monday 6 April 2020. Also, the maximum compensatory award for unfair dismissal increases from £86,444 to £88,519.

HR professionals should ensure that calculations for statutory redundancy payments are made on the basis of this maximum amount for redundancy dismissals on or after 6 April 2020.

Other increases appear in detail on the following page of the Government website https://www.legislation.gov.uk/

Apprenticeships – Government attacks employers for misusing apprenticeship funding

Education Secretary Gavin Williamson has attacked employers in England who use apprenticeship funding to pay for qualifications for senior managers. He wants to stop firms using the apprenticeship levy to subsidise Master of Business Administration (MBA) courses for “highly paid” managers. Instead he wants to direct funds towards helping to kick-start careers or level-up skills and opportunities.

The apprenticeship levy takes 0.5% of the salary bill from major employers – with the intention of using the money to improve skills and provide training. But the scheme has faced accusations that “fake apprenticeships” are being created to access funding, rather than helping young people into new opportunities. He’s ordered a review of the senior leader apprenticeship.

New scheme to ‘name and shame’ employers who break National Minimum Wage law

The government recently announced that it intends to re-start naming and shaming employers who fail to pay the national minimum wage (NMW). The National Minimum Wage Law:enforcement indicates that employers who don’t pay the NMW will be given a Notice of Underpayment from HMRC, detailing the names of staff who have been underpaid, the amount they are owed and the penalty imposed. Employers have 28 days to pay the total amount. There’s an incentive to paying earlier as the penalty (which can be as much as £20,000 per worker) is halved if payment is made within 14 days. Now, naming will take place more quickly than before.

Non-compliant employers will have 28 days to appeal or pay otherwise their names will be referred to the Department for Business, Energy and Industrial Strategy (BEIS).

NLW and NMW rates from 1 April 2020

As we detailed in our Employment Law Latest seminars late last year National Living Way and National Minimum Wage rates increased from 1 April. Please see below all the details.

                                         Previous rate   Current rate from 1 April 2020     Increase
National Living Wage       £8.21               £8.72                                           6.2%
21-24 Year Old Rate         £7.70               £8.20                                           6.5%
18-20 Year Old Rate         £6.15               £6.45                                           4 .9%
16-17 Year Old Rate         £4.35               £4.55                                           4.6%
Apprentice Rate                £3.90               £4.15                                           6.4%
Accommodation Offset   £7.55               £8.20                                           6.4%

We will continue to keep you updated on general employment law news and any news linked to the coronavirus pandemic via regular blogs and our YouTube channel.

Click here for our YouTube channel and watch the latest videos on updates during the crisis.

Meanwhile, if you would like further information on any of the topics detailed in this blog please email advice@sherrardslaw.com or call the office on 01273 834120 to talk to a member of our team.