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4th April, 2022

Changes in Employment Law Rates and Limits

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From the beginning of April 2022, there have been various changes to employment rates and limits.

National Living Wage (NLW) and National Minimum Wage (NMW)

From 1 April 2022, the NLW and the NMW rates will be:

  • NLW rate – age 23 or over – £9.50 (up from £8.91).
  • Age 21 to 22 – £9.18 (up from £8.36).
  • Age 18 to 20 – £6.83 (up from £6.56).
  • Age 16 to 17 – £4.81 (up from £4.62).
  • Apprentice rate – £4.81 (up from £4.30).
  • Daily accommodation offset rate – £8.70 (up from £8.36).

It is worth noting that the NLW and the NMW applies to most workers (with some exceptions). A worker is an individual who works under either (1) a contract of employment; or (2) a contract to personally do or perform work or services for another, provided that the other is not a customer or client of a profession or business undertaking carried on by the individual. Therefore, an individual who does not qualify for worker status (i.e. because they are self-employed) is not entitled to receive the NMW.

Family Leave

From 3 April 2022, for statutory family leave, the following will apply:

  • Statutory maternity pay and statutory adoption pay – from week seven onwards, this will be either the prescribed rate which is now £156.66 per week (up from £151.97); or the earnings-related rate which is 90% of the employee’s normal weekly earnings, whichever is lower.
  • Statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay – the weekly rates will again either be the prescribed rate which is now £156.66 per week (up from £151.97); or the earnings-related rate which is 90% of the employee’s normal weekly earnings, whichever is lower.

Statutory Redundancy Pay

Employees who are made redundant and have two years’ continuous service are entitled to a statutory redundancy payment. From 6 April 2022, the cap on a week’s pay for redundancy calculation purposes increased to £571 (from £544). The overall maximum statutory redundancy pay therefore increased to £17,130 (from £16,320).

Statutory Sick Pay (SSP)

The SSP scheme entitles qualifying employees who have been absent from work for four or more consecutive days to receive a minimum weekly payment. To qualify for SSP, the employee must have average weekly earnings of not less than the lower earnings limit*. Employees are entitled to up to 28 weeks’ SSP in any period of incapacity for work. From 6 April 2022, the SSP rate increased to £99.35 per week (from £96.35 per week).

For eligibility purposes, the lower earnings limit increased to £123 per week (from £120 per week).

Employment Tribunals

For dismissals taking place on or after 6 April 2022, the limit on a week’s pay for the purposes of calculating the basic award increased to £571 (from £544). The maximum compensatory award for a claim of unfair dismissal also increased to £93,878 (from £89,493). Please note that the statutory cap on the compensatory award is removed if an individual successfully pursues a discrimination claim.

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