Legal Updates for Employment – 2021

A brief summary highlighting important legislation changes that are coming into effect this year, relative to the employment industry. Including Brexit, IR35, changes to wage rates, gender pay gap reporting and more. We hope you find it helpful.

January 2021

1. Changes to wage rates in 2021

As a Recognised Service Provider of the Real Living Wage we champion the only wage to be based on what people need to live.  For those of you who also support the foundation, the rates for 2021 which were announced on 9th November 2020 need to be implemented by employers by 9th May 2021.


With effect from 1st April 2021, the National Minimum Wage and the National Living Wage will increase.  In addition to these changes, the age threshold for the National Living Wage will lower from 25 to 23, thus abolishing the 23-24 Minimum Wage category.  The Apprentice Wage will also increase from £4.15 to £4.30.   See the full rate increases for all other categories below.

2. Brexit

From 1st January 2021, all EEA and Swiss citizens moving to the UK for the first time will need to obtain a visa in advance.  Employers who wish to hire skilled workers from outside the UK, may need to apply for a sponsor licence.  Any existing citizens from the EU who are currently working in the UK can continue to do so, but may need to apply for EU Settlement Status to stay in the UK after 30th June 2021.  This does not apply to those EU citizens who are Irish or already have indefinite leave to remain.  

Next steps? 


3. Gender pay gap

The compulsory production of gender pay reports is expected to return this year. Companies with a minimum number of 250 employees by the relevant snapshot date are eligible to submit a report to the government.  However, those employees who were furloughed in 2020 (earning 80% of their wages) are not to be included in the report, so the final data may not be fully representative of the real situation. 

Next steps?


  • Key questions for employers to ask to help identify potential causes of gender pay gap – Employer questions


4. Changes to IR35

IR35 is a term used to describe tax legislation designed to combat tax avoidance by workers and, by the firms hiring them, who are supplying their services to clients via an intermediary, such as a limited company, but who would normally be an employee if the intermediary was not used. 


The Government is replacing IR35 with the new Off-Payroll working (currently in place for the public sector) and will be extending to the private sector with effect from 6th April 2021. The changes will affect medium to large businesses only, with small businesses unaffected.  The definition of a medium-large sized company is those with over 50 employees, net turnover in excess of £10.2m and have over £5.1m on their balance sheet.


Next steps? 


5. 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, however the protection ends once the employee returns to work.  In July 2019, the government announced that pregnant workers, those on maternity leave and new parents returning to work after an extended period of family leave would benefit from enhanced redundancy protections.  The change would extend redundancy protection for six months from the date of a mother’s return to work, as well as covering those taking adoption or shared parental leave.  


However, there is currently no announcement regarding the introduction of this enhanced protection legislation, although many are calling for changes to be made urgently due to the pandemic.  The latest communication received from the Recruitment & Employment Confederation (REC) states that the legislation is due to have a reading in the House of Commons in March this year.

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