April may mean Easter to many but for the HR and Employment Law world it means statutory changes, it really is just 2 weeks away…
As an Employer you need to be aware of some or all of the statutory changes and how they may affect you, along with what you should keep in mind when in relation to NMW, NLW and other Statutory increases.
You can find fuller details of payment increases in our latest news on our website.
Changes to Employment Tribunal Compensation Awards and Rates
As of 6 April 2021, the Employment tribunal compensation rates will increase.
From 6 April 2021, the maximum week’s pay for redundancy pay purposes will increase from £538 to £544; there will be no change to the statutory guarantee pay, that will remain the same at: £30.
Why is this important
For the purposes of tribunal claims it means that the maximum statutory redundancy pay, along with the unfair dismissal basic award pay, they will both now be set at £16,320.
An unfair dismissal compensatory award, awarded to compensate the claimant for past and future loss attributed to the dismissal, will be a maximum of 52 weeks’ pay, and subject to a new maximum of £89,493.
The maximum amount of additional award for unfair dismissal, awarded to compensate claimants when Employers fail to adhere to a tribunal instruction to re-engage them, considering average weekly earnings, will now increase to £28,288.
Increases to Statutory Sick Pay (SSP)
Employers are liable for the payment of Statutory Sick Pay (SSP) to all eligible Employees.
This will increase from the current rate of: £95.85 per week and is set to increase from 6 April 2021 to £96.35. The lower earnings limit in relation to eligibility to statutory payments will remain the same at £120.00 per week.
Increases to Family leave
Statutory Family Leave payments will increase from £151.20 per week, an increase of: 0.77 pence, the new payment will be: £151.97 per week as of: 4 April 2021. This will affect all weekly rates including, Maternity, Paternity leave, etc.
Increases to National Minimum Wage rates
From 1st April 2021, National Minimum Wage (NMW) and National Living Wage (NLW) rates are also set to increase. The new hourly rates are as follows:
- £8.91 Workers aged 23 and over (National Living Wage)
- £8.36 Workers aged 21-22
- £6.56 Development rates for workers aged 18–20
- £4.62 Young workers rate for workers aged 16–17
- £4.30 Apprentices under 19, or over 19 and in first year of the apprenticeship
The National Living Wage (NLW) threshold is lowering to include all those aged 23 and over.
The New IR35 Rules
The long debated IR35 legislation, which aims to ensure that contractors are paying the appropriate amount of tax, will be changing, this will affect many private sector businesses.
At present most Contractors are required to determine their own ‘status’ as Employee or Contractor. Under IR35 legislation and as of 6 April 2021, the liability will pass to medium and large-sector clients. SME’s and smaller businesses will be exempt from this obligation, this will mean the Contractor remains liable for determining their own tax status.
How can we help you?
We can provide you with up to date HR and or Employment Law advice and guidance, at a time that suits you, we can provide you with the necessary documentation to ensure you remain legally compliant.
Why not get in touch with a member of the HR and You Ltd team, or you can now book straight into our calendars for a free consultation or just a free chat.