Statutory Employee Payment Increases
Further to our update on key employment law changes this time last year, we can now confirm the changes that will be coming into force in April 2018.
Statutory Redundancy Pay Increase
Under the statutory redundancy scheme, there is a maximum limit on the weekly pay that is awarded. From 6 April 2018, this will increase from £489 to £508.
If you dismiss employees due to redundancy, then you must pay those with 2 years’ service an amount based on the employee’s weekly pay (as above), length of service and age.
Statutory Family – Related Pay and Sick Pay Rates Increase
Statutory Maternity, Paternity, Adoption and Shared Parental Pay will rise from £140.98 a week to £145.18 a week, effective from 9 April 2018.
Statutory sick pay is also due to increase from £89.35 to £92.05.
Limit on Amount of Compensatory Award for Unfair Dismissal
The maximum compensatory award for unfair dismissal claims is increasing on 6 April 2018 from £80,541 to £83,682.
National Minimum Wage and National Living Wage
On 1st April 2018, the National Minimum Wage will increase. For workers age 25 and over, it will increase from £7.50 to £7.83 an hour (this is known as the ‘National Living Wage’).
It is important to adhere to the National Minimum Wage, as you could be liable to compensate an employee who has not received it within a specific reference period. For more information on this, please see our previous article ‘The National Minimum Wage: Are You Compliant?’.
What could this mean for you?
Employers must ensure they are correctly calculating employees’ entitlement to statutory payments, taking into account the date of termination and the date the new rates come into force. If you require any assistance with this or you would like some further advice, then please Talk to Tollers, we are HeRe for you.