These 6 key changes to employment law will be introduced in 2021 - what it means for workers

Wednesday, 25th November 2020, 11:43 am
Updated Wednesday, 25th November 2020, 11:44 am

Numerous employment law changes are expected to come into place next year, including a new immigration law, the increased requirement of Modern Slavery statements and the return of gender pay gap reports.

Kate Palmer, HR Advice and Consultancy Director at global employment law consultancy, Peninsula, gives her advice regarding the six key changes to employment law - and what it means for both employers and employees.

New immigration law

From 1 January, free movement of persons will end, and with this comes a whole new set of immigration laws.

All foreign nationals will now need to seek to enter the UK in the same way, with many expected to use the ‘Skilled Worker Route’.

To be able to work legally in the UK, “foreign nationals have to meet specified criteria in order to earn at least 70 points,” explains Ms Palmer.

This involves being offered a job from an approved sponsor. If a company intends to take on foreign workers from the beginning of 2021, then they will need to apply for a license as soon as possible.

Furlough scheme ends

The furlough scheme is currently expected to end on 31 March 2021, with Ms Palmer advising that, “Employers should plan for steps they are going to take when they no longer have this support from the government.”

Redundancies may have to be considered, but employers should also be prepared to look at alternative options.

The return of gender pay gap reporting

Due to the coronavirus pandemic, compulsory production of gender pay gap reports was paused for eligible companies.

However, this is expected to return next year, which will mean that organisations with at least 250 employees by the relevant snapshot date will be expected to produce a report.

New IR35 requirements

From April 2021, eligible large and medium sized organisations who engage contractors through intermediary companies will be responsible for assessing the employment status of those contractors.

Under the new rules, where workers are engaged through their own companies, the responsibility to apply IR35 (the UK’s anti-avoidance tax legislation) and to pay any associated tax and National Insurance contributions (NICs), will fall to the private company, agency or other third party paying the worker’s company.

These new rules were originally expected to come into place in April 2020, but were delayed due to the coronavirus pandemic.

More companies to produce Modern Slavery statements

Following a consultation which was held in July 2019, the government have confirmed plans to require an increased number of companies to produce a Modern Slavery statement.

This will involve setting out the steps they are taking in order to combat modern slavery, both within their own operation and their supply chain.

Public sector organisations with a budget of at least £36 million will also be required to publish a statement.

These statements will be required to cover specific topics and be published on the government registry.

However, the date that the new requirements will come into force has not yet been confirmed, but the registry is expected to be launched in ‘early 2021’.

Extended redundancy protection for pregnant employees

Currently, those on maternity leave who are at risk of redundancy must be offered suitable alternative roles in advance of others. This protection then ends once the employee returns to work.

However, future changes will instead mean that this protection starts from the date the employee informs her employers that she is pregnant - whether verbally or in writing - and will last for a further six months after the employee returns to work.

The extended protection will also be available to those on adoption leave and shared parental leave, but it has not yet been confirmed exactly when this will come into force.