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April 2021 Employment Law Changes

April 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:

AgeNMW rate from 6 April 2021Increase from last year
21-22£8.362% (from £8.20)
18-20£6.561.7% (from £6.45)
16-17£4.621.5% (from £4.55)
Apprentice Rate£4.303.6% (from £4.15)


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.

What next after COVID?

The employment law ramifications of the pandemic are still being felt. The furlough scheme is currently expected to continue until the end of September 2021. Whilst the economy slowly re-opens it is still anticipated that there will be some social-distancing measures in place and employers will need to ensure that they continue to conduct risk assessments in relation to the health and safety of their staff. Policies relating to testing and social distancing are likely to become the norm for many employers, particularly through the winter months.

As well as this, discussions regarding vaccine passports are still ongoing and a consultation has been launched by the government to look at whether vaccines should be made compulsory for certain sectors, for example the care sector. This will raise many questions for employers and employees alike about vaccinations and the workplace. The Equality and Human Rights Commission have warned that the introduction of vaccine passports could be discriminatory and, in effect, create a two-tier society. In their recent guidance ACAS have also stopped short of giving a view as to whether employers can make vaccines mandatory in the workplace. It is, therefore, highly likely that 2021 will see some test cases relating to this issue.

If you have any questions about the changes introduced in April 2021, please email or call our Employment Law team today on 0113 207 0000.


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Paul Kelly

Partner and Head of Employment
Employment Law
0113 227 9249
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Paul Kelly Blacks Solicitors LLP