April 2021 Employment Law Changes for Small Businesses

Following on from the Budget last week please find below all the changes to Employment Law that are happening in April 2021.

National Living Wage / National Minimum Wage

The important thing to note is that the threshold for the National Living Wage is now applied to those workers aged 23 or over rather than 25 or over.

Rates from April 2020

Rates from April 2021

National Living Wage



21-22-Year-Old Rate



18-20-Year-Old Rate



16-17-Year-Old Rate



Apprentice Rate




From the 6th April 2021 Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Maternity Allowance will all increase from £151.20 to £151.97 per week.

Statutory Sick Pay will increase from £95.85 to £96.35 per week from the 6th of April 2021.

Update your statutory redundancy pay calculations

From the 6th April 2021, the new limits on employment statutory redundancy pay come into force.

The new weekly maximum is £544.

This also, therefore, increases the maximum compensatory award for Unfair Dismissal from £88,519 to £89,493 for dismissals that take place on or after 6 April 2021.

Pension Increase

There are NO pension increases this year but you need to just confirm that you are paying a total of 8% for each employee.  Generally, it is a 3% employer payment and a 5% employee payment, but an employer can choose to pay 4% reducing the employee’s payment by 1%.

Advisory Fuel Rates

Just in case you missed it in March, the advisory fuel rates increased from the 1st March 2021 to the following:

The advisory electricity rate for fully electric cars is 4 pence per mile.

Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

The advisory fuel rates for petrol, LPG and diesel cars are shown in these tables.

From 1 March 2021

You can use the previous rates for up to 1 month from the date the new rates apply.

Engine sizePetrol – rate per mileLPG – rate per mile
1400cc or less10 pence7 pence
1401cc to 2000cc12 pence8 pence
Over 2000cc18 pence12 pence
Engine sizeDiesel – rate per mile
1600cc or less9 pence
1601cc to 2000cc11 pence
Over 2000cc12 pence

What Do You Need to do As An Employer?

  • Review your pay rates to ensure that they reflect the new rates of pay from 1st April 2021
  • Ensure that anyone currently on any statutory payment benefits is given the correct rate from 6th April 2021.
  • Update your expenses policy with the new Advisory Rates for mileage.

Kate Underwood HR Can Help You Today

Just like your car MOT or wellbeing, it is important to ensure you keep up to date with your HR – our  HR Health Check doesn’t increase when the budgets increase because it’s free!

If you have any questions about the April 2021 Employment Law Changes for Small Businesses, or would just like to book an informal chat, please click here.



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