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Employment law update April 2021

New rates for the national living wage and national minimum wage

The government accepted in full the Low Pay Commission's proposed increases to the national living wage and national minimum wage rates, which came into effect on 1 April 2021.

The new rates are:

  • Age 23 or over (NLW rate): £8.91 (up 2.2% from £8.72).
  • Age 21 to 22: £8.36 (up 2% from £8.20).
  • Age 18 to 20: £6.56 (up 1.7% from £6.45).
  • Age 16 to 17: £4.62 (up 1.5% from £4.55).
  • Apprentice rate: £4.30 (up 3.6% from £4.15).
  • Accommodation offset £8.36 per week (up 2% from £8.20).

Increase on compensation

Compensation limits for certain tribunal awards and other statutory payments increase to:

  • The limit on a week's pay increases from £538 to £544.
  • The maximum compensatory award for unfair dismissal increases from £88,519 to £89,493.
  • The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £6,562 to £6,634.


The rules on off -payroll working in the private sector took effect on 6 April 2021 and are intended to counter non-compliance with IR35. The measure shifts the compliance burden from the worker's personal service company to the medium and large "client" organisations that they work for, by treating the client organisation as an employer for income tax and NICs purposes.

National minimum wage: sleep-in shifts

In Royal Mencap Society v Tomlinson-Blake [2018] EWCA Civ 1641 the Supreme Court held that care workers who were expected to sleep at, or near, their workplace, and be available to be called on during the night, were not entitled to the NMW for their entire sleep-in shifts. During this time, the workers could not be described as actually working under regulation 30 of the NMW Regulations 2015 but rather were "available for work" under regulation 32, meaning that they were entitled to the NMW only for hours during which they were awake for the purposes of working.