Employment Law Changes 2021 - Impact on Property & Construction Industries

Published: January 18th, 2021

7 min read

Under the new lockdown restrictions, the government has urged all employees to work from home unless they cannot "reasonably" do so. The very nature of the construction sector means that this is not possible for construction workers and so despite the tighter restrictions they can thankfully continue to work as normal. Of course, the industry has undoubtedly been affected by the global pandemic and the working environment for construction workers will be far from 'usual'. This however is not the only change that we can expect to see in the property and construction sector in 2021 and below are a few important changes to be aware of.

Immigration and Recruitment

From 1 January 2021, free movement has ended which means businesses will face difficult and expensive requirements to recruit individuals from outside the UK.

A new points based system has been implemented that prioritises skills and talent over where a person comes from. From the 1 January 2021 workers need to meet the following requirements in order to work in the UK:

  • Must be able to speak English
  • Have A-Level qualifications or equivalent
  • Have a job offer from a licensed sponsor
  • Earn a minimum of £25,600 per year

A 'shortage occupation list' allows employers to pay workers slightly less than the required amount under the points based immigration system, which includes job roles such as engineers, architects and quantity surveyors (excluding plumbers electricians and brick layers).

The above requirements will exclude a large amount of workers in the property and construction sector, with no option of being able to recruit general low skilled or temporary workers.

You can continue to employ EU citizens until 30 June 2021 providing that they were already living or working in the UK before 31 December 2020. Any such workers however will need to have obtained settled or pre-settled status to work in the UK from 1 July 2021. Without this, you will not be able to continue to employ them as they will be classed as illegal workers.

If you wish to retain EU staff beyond 30 June 2021 you should encourage them to apply to remain in the UK and ensure they understand the consequences of failing to have the right to live and work in the UK.

There are also financial implications and obligations on employers. You will be required to have a sponsor licence to recruit workers from outside the UK. The process takes around 8 weeks and costs £199 for each sponsor licence. There is also a cost of £1,000 in addition to the £199 fee for any skilled worker you recruit for the first 12 months. After the first 12 months, there will be a fee of £500 for every subsequent 6 month period.

If you are unsure about the next steps to take with EU workers, we have a specialised business immigration team within our employment team. Please contact Amy Stokes, Senior Associate in Employment and Business Immigration Amy Stokes for further information and advice.

IR35/off-payroll workers

From 6 April 2021, the IR35 rules will be applicable to the private sector. These have already been in place in the public sector since 2017 and aim to ensure that individuals who work as if they are employees, pay the same tax as employees, irrespective of what structure they are working under.

This applies to anyone who provides their services through an intermediary such as a personal service company. The responsibility will shift from the personal service company to the business engaging the contractor, to determine the contractors tax status and in doing so to decide whether IR35 applies. If the contractor is an employee for tax purposes, it will be the employer's responsibility to pay PAYE and National Insurance contributions on the fees that are paid to the personal service company.

Employment Bill Post Brexit

The government has also highlighted the possibility of introducing an Employment Bill to protect and enhance workers' rights as the UK leaves the EU.

This could involve the introduction of new legislation to ensure the following:

  • A right for all workers to request a more predicable contract
  • Introduce new rights for parents to take extended leave for neonatal care
  • Introduce the right for carers to take one weeks unpaid leave per year
  • Introduce flexible working as the default position

Although we don't have too much detail yet on the above suggestions, it could be that we see some legal changes in 2021.

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