Top employment issues for 2021

As the New Year approaches, below are the top employment issues which should be on your agenda for 2021. 

Long-term home working

Employers have spent most of 2020 wrestling with the problems caused by the COVID-19 pandemic. With the launch of a vaccination programme, some normality may start to return by next spring. Nevertheless, employers need to be prepared for the long-term structural changes that the pandemic may bring about. The main example of this is the issue of remote working, particularly for office-based workers. Many employees have seen the benefits of working from home and may well want to continue doing so, either on a full-time or part-time basis, even when COVID-19 restrictions are relaxed. This is something employers will need to focus on next year. There are clearly advantages in bringing staff back to the office in terms of greater engagement with colleagues, the supervision of juniors and so on, although these should be set against factors such as the potential saving in office costs where staff work from home. Employers should think about the balance they want to strike, for example whether a 60/40 model, with three days in the office and two at home, would satisfy both employer and staff. 

If you plan to allow home working on a long-term basis, it would be sensible to adopt a formal home working policy. You then have one official policy across the organisation rather than different arrangements being agreed by individual managers. Having a formal policy also helps you focus on what the issues are around home working that should be addressed and how you want to deal with them. For example, will home working be automatic or do employees need to make an application? What criteria will apply? In what circumstances can the arrangement be terminated? When will you need the employee to be present at work, for example for specific meetings, appraisals or training? Other matters to consider include equipment and facilities, the potential reimbursement of heating and other costs, health and safety issues, data security, whether employees need to work core hours and so on. If you would like help in putting a homeworking policy together, please get in touch with us.

Returning to the office

On the other side of the coin, many employers will be keen to get their staff back to the office (or other workplace) as soon as possible in 2021, should government advice to work from home where possible be lifted. Employers have invested time and money in ensuring a safe working environment for staff and the obligation to do so will of course continue. As an employer, you will need to think about how you can maintain safe working practices as staff return to work in greater numbers, bearing in mind the need to comply with government guidance. There may come a time when some safety measures can start to be relaxed but you should approach this with caution. The availability of vaccines may also cause practical and legal issues for employers, for example whether they can insist on employees having a vaccine if one is available to them and whether staff should be allowed back only as and when they have been vaccinated, even if that means younger staff returning last. We can talk you through these issues if that would be helpful.

If employees are still reluctant to return to the workplace once restrictions are eased, the situation will need to be handled sensitively and allowances made within reason, although it could ultimately become a disciplinary issue.

New immigration rules

The government has introduced a new points-based immigration system. This will apply to anyone coming to work in the UK from overseas - other than Irish nationals - from 1 January 2021 onwards. Those of you who are familiar with the current immigration system for non-EU nationals will recognise similarities in the new system but there are significant differences to be aware of. 

Among other things, there are changes to the immigration route for skilled workers, to the cooling off rules and to the way in which individuals can switch between immigration routes. EU nationals already living in the UK by the end of 2020 can apply for settled or pre-settled status but new arrivals will need to follow one of the new immigration routes. Employers who do not already have a sponsor licence should assess whether they need to apply for one. More information on the new rules is available in our briefing here and we would of course be happy to answer any questions you may have. 

Off-payroll working rules

New rules on off-payroll working were due to take effect in April 2020 but, as a result of the pandemic, were deferred until 6 April 2021. Under the new rules, medium and large employers in the private sector will become responsible for determining the employment status of contractors and consultants for tax purposes and ensuring that the right employment taxes are paid. More information is available in our briefings here and here. If you would like a copy of our action plan, please get in touch.

If you have not already done so, you need to analyse whether any of your contractors could in fact be regarded as employees for tax purposes. If that is possible, you should weigh up the risks involved and consider whether you need to change your contractual arrangements. If you don't take appropriate action, you could expose yourself to significant liabilities for tax and national insurance so this should be a priority for the new year.

Modern Slavery Act statements

After a long consultation period, the government confirmed recently that it will be bringing forward reforms to the transparency reports employers have to publish under the Modern Slavery Act. Among other things, those aspects of a modern slavery statement that are currently voluntary will become mandatory and there will be a single new reporting deadline. More information about the changes is contained in our briefing here.

We do not yet know when these reforms will take effect as the government has said only that it will bring forward the necessary legislation "when parliamentary time allows". Statements are likely to go ahead as normal for 2021 financial years. Nevertheless, organisations should start to plan ahead and think about what systems and processes they will need to put in place to ensure they are able to comply with the new requirements when the time comes.

Gender pay reporting

Employers with 250 or more employees have to publish data on their gender pay gap by 4 April each year. This requirement was suspended for 2020 as a result of the pandemic, although a number of employers chose to publish their reports anyway. As things currently stand, a gender pay gap report will need to be published in 2021. 

The Regulations on gender pay gap reporting were not designed with furlough in mind but furloughed employees may need to be excluded from the data where they were on reduced pay at the snapshot date. Their non-inclusion may skew the gender pay gap figures and particular thought will need to be given to the explanatory narrative accompanying the data. 

Senior Managers and Certification Regime

For employers in the financial services sector, the FCA has confirmed that 31 March 2021 will be the new deadline for solo-regulated firms to comply with certain aspects of the Senior Managers and Certification regime, postponed from 9th December this year. The conduct rules for staff who are not senior managers, certification staff or board directors will now come into force on 31 March 2021 and relevant staff must be trained on those rules by that date. Firms also have until 31 March to assess certified persons as fit and proper and to submit information about directory persons to the Financial Services Register. 

Please contact us if you would like further information on any of the issues raised above.