A round-up of employment law rates changes

We review key rates and figures changes in employment law

April is an important month for businesses up and down the UK as the traditional marker of the end of one Financial Year and the start of another. Many important changes relevant to employers happen at this time as well. Below, we summarise some of the most noteworthy and scan ahead to changes expected in the next 12 months.

National Living Wage and National Minimal Wage rate increases

From 1 April 2023 these rates increased in line with recommendations from the Low Pay Commission, as accepted by HM Government in its Autumn statement of 17 November 2022.

Also of note, the Department for Business and Trade (DBT) published a report concerning the figures around National Minimum Wage and Living Wage enforcement during the 2021-2022 financial year.

£16.3 million in arrears was identified for over 120,000 workers, with HMRC issuing nearly 700 penalties totalling £13.2 million. This led to 399 employers being ‘named and shamed’ for £3.3 million of wage arrears owed to 46,000 workers.

Increases to rates and limits

The following key rates and limits were increased in April.

Family-friendly leave-related pay and statutory sick pay

Following an announcement by HM Government in December 2022, proposed increases to parental leave pay and statutory sick pay were implemented in April 2023.

From 2 April, statutory maternity, paternity, adoption, shared parental and parental bereavement pay increased from £156.66 to £172.48 per week

Statutory sick pay increased from £99.35 to £109.40 per week from 6 April.   

Redundancy

From 6 April the maximum payment for a statutory redundancy payment increased from £17,130 to £19,290.

Unfair Dismissal

The caps for payments for successfully claiming unfair dismissal increased as follows from 6 April:

• Basic award (calculated on the same basis as statutory redundancy payments) increased from £17,130 to £19,290
• Compensatory award increased from £93,878 to £105,707
• Additional award (issued for failure to comply with a re-instatement or re-engagement order) increased from a min/ max of £14,846 to £29,692 to £16,718 to £33,436

These caps reflect increases to the statutory limit on a gross week’s pay, which also increased on 6 April from £571 to £643.

Injury to feelings (Vento guidelines)

From 6 April, injury to feelings awards, which are included in damages packages for discrimination and detriment known as the ‘Vento guidelines’ increased as follows:

Increases to the limits applicable to unfair dismissal and discrimination show a significant trend upwards, reflecting the broader inflationary effects seen in the UK economy over the last 12-18 months. Particularly of note, a compensatory award can, for the first time, now exceed £100,000, and significant increases to the Vento guidelines means employers face considerable damages awards costs if claimants are successful in establishing serious cases of discriminatory treatment.