The past two years have been full of immense upheaval — from the outbreak of a global pandemic to Britain’s exit from the EU.

And while every aspect of modern life has shifted over the past 18 months in response, the world of work has arguably seen some of the most permanent changes that’ll have the most profound impact on businesses.

As such, it’s no surprise that employment law has undergone (and is continuing to undergo!) a shift alongside our rapidly evolving society. Brexit laws finally came into force, sick pay regulations were adapted to a world that’s home to COVID-19, workers’ rights took a pivotal pandemic-induced shift, and the furlough scheme came to an end.

Let’s take a closer look at what these changes mean for your business…

Spelling the end of free movement

The 1st of January 2021 marked the end of free movement for workers when new Brexit immigration requirements came into play, meaning anyone from outside the UK now requires a visa to work there. Foreign nationals can enter via the ‘Skilled Worker Route’ and must meet specific criteria — one of which is being offered a job from an employer with an approved ‘sponsor’ licence.

Companies looking to hire foreign nationals will need to apply to register their business as a licensed sponsor. If your business is eligible, you’ll need to appoint people within your organisation to manage the sponsorship process and ensure compliance.

The type of licence you need will depend on the size/type of your organisation, and the application fee can cost up to £1,476. Each staff member sponsored then costs up to £199, in addition to the usual visa application fees. You’ll also need to issue a ‘sponsorship certificate’ to each candidate that endorses your prospective employee’s visa, followed by paying the Immigration Skills Charge. Currently, this is £1,000 for the first year of UK work and £500 for each additional six months.

Adjusting pay and payroll

April was a particularly busy month for pay and UK payroll rules.

Each employee is now also entitled to £96.35 a week (up from £95.85) in Statutory Sick Pay (SSP) if they’re too sick to work. This SSP rate applies to all employees or agency workers who earn an average of at least £120 a week, but they’ll need to have been ill or self-isolating for at least four consecutive days to quality for SSP. It’s critical to be aware of these changes and the eligibility criteria, as this will ensure you’re paying employees the correct amount and are deducting the right amount of tax.

If an employee was off work with COVID-19 or self-isolating on or before the 30th of September 2021, you might be able to reclaim up to two weeks’ SSP.  The standard SSP rate of £96.35 a week (per employee) applies, but you can’t reclaim it if your employee is off sick for anything other than COVID-19. All claims must be submitted or amended on or before the 31st of December 2021 to be valid.

However, one of the most significant changes to take place in April 2021 was the introduction of the new IR35 regulations, where off-payroll working rules were extended to the private sector. If your business is receiving services from a worker through your own limited company or another type of intermediary, these regulations now apply to you. The biggest amendment comes for medium or large businesses as the onus now falls on you (not the intermediary) to determine the status of any workers you engage with.

Clamping down on worker’s rights

From the 31st of May, workers gained the right not to be subjected to detrimental treatment for leaving or refusing to return to work if they think they’re in ‘serious or imminent danger’ — a clause in section 44 of the Employment Rights Act 1996 that previously only applied to permanent employees.

This change has come as a direct response to the fallout from COVID-19, as workers displayed concerns about travelling or being at work during the pandemic. Employers have seen a stark increase in section 44 claims, with more workers than ever feeling concerned about their employer’s duties to offer a COVID-secure workplace. While the legislation shouldn’t prevent employers from requiring a return to the workplace, employers should be wary that they could find themselves facing a claim of this nature if a worker feels unsafe returning.

Saying goodbye to the furlough scheme

On the 1st of July 2021, the government grant for the Coronavirus Job Retention Scheme (also known as ‘furlough’) went down, meaning employers had to begin contributing 10% of furlough pay for any unworked hours — rising to 20% on the 1st of August. The furlough scheme then came to an end on the 30th of September.

Businesses are now well-equipped with advice on how to successfully re-onboard furloughed employees. However, open, ongoing communication will be central to allow your staff to raise any concerns about returning from furlough, give them the tools they need to settle back in and ensure they feel valued in the company.

Anticipating adjustments for 2022

Although we’re finally beginning to return to a lifestyle with fewer restrictions and apprehensions, the impact of the pandemic will continue to affect employment regulations as we move into 2022 — and businesses need to be prepared for these changes.

For example, there are likely to be further changes to the various statutory rate frameworks. Additionally, shared parental leave and pay will be extended to working grandparents, allowing parents to share leave with one nominated working grandparent. And after 26 weeks of service, workers will be able to request a right to a more predictable contract.

The much-anticipated Employment Bill will also come into play in 2022. These new regulations will include changes to neonatal leave and pay, movement around unpaid leave for carers and new legislation to ensure tips and gratuities go straight to restaurant staff.

However, one of the latest changes to come out of the pandemic is the increase in National Insurance contributions (NICs). From April 2022, NICs will rise by 1.25% for all working adults in the UK and be matched by employers.

In light of so much change, it’s vital that businesses stay on top of the ever-changing employment regulations to ensure you’re paying your staff correctly and are meeting all compliance requirements — all while factoring these changes into your budgets.

Or you could hire a total employer services provider to take care of it all for you…

If you’re worried about staying on the right side of the law when it comes to UK employment rules, TopSource Worldwide is the global employer of record you can count on. We’re constantly one step ahead of the curve, so we’ll ensure you’re aware of any changes to employment regulations and keep your UK payroll compliant. Get in touch now to find out how we can support you.  


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Published On: October 27th, 2021Last Updated: July 11th, 2022

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About the Author: Sam Barnes

Sam is our Global Business Development Manager for Employer of Record services. For the last 10 years, he has assisted companies in the successful execution of their international expansion plans. Sam tells us “There’s something inherently exciting about growing a business into overseas jurisdictions. Each country does things slightly differently and it’s great to be able to share learnings on statutory requirements and cultural nuances”. Email: