Don’t be an April Fool!

April heralds the usual changes to employment statutory rates and limits, most of which will come into effect on 6 April 2022.  Our Employment Team summarises the main changes below.

National Minimum/Living Wage

The National Living/Minimum Wage rates will increase from 1 April 2022, as follows:

• Age 23 or over (NLW rate): £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); and
• Accommodation offset rate £8.70 (up from £8.30 per week).

We recommend employers audit all low-earners receiving a gross annual salary (rather than being paid by the hour) to ensure that their working hours do not leave them falling short of the new NLW/NMW rates.  Adjust salaries and/or working hours where appropriate to ensure ongoing compliance. 

Redundancy pay, basic award and a week’s pay

On 6 April 2022 the cap on a “week’s pay” for the purposes of calculating redundancy payments and Tribunal awards will increase to £571 (up from £544). 

This means that the maximum amount of statutory redundancy pay an employee can receive, will rise to £17,130 (although this is still subject to the employee’s age, length of service and gross weekly pay).

The basic award for the purposes of calculating tribunal compensation in unfair dismissal cases (which is calculated in the same way as statutory redundancy payments) will also see a corresponding increase to £17,130. 

Employers should note that the new rates will apply to all redundancies/dismissals which take effect on or after 6 April 2022.  Statutory notice is added onto the termination date (regardless of whether the employee is paid in lieu of their contractual/statutory notice period) and so the new rates will apply even if the dismissals take place between now and 5th April

Statutory Maternity and Paternity Pay and Sickness pay

On 2nd April Statutory maternity/paternity pay will increase to £156.66 per week (up from 151.97) .  There is no change to the 33 week payment period.   

Statutory sick pay will rise to £99.35 per week (up from 96.35).

Vento Bands for injury to feelings

Employers will be aware that in certain types of claims (such as discrimination claims) tribunals can, in addition to awarding compensation for loss of earnings, also award a sum for injury to feelings.

The amount awarded will depend on the Tribunal’s view of the severity of the discrimination.  For clams presented on or after 6 April 2022, the Vento bands will be as follows:

• Lower band (applied in less serious cases) - £990 - £9,900
• Middle band (for cases that do not merit an award in the upper band) - £9,900 - £29,600;
• Upper band (for the most serious cases) - £29,600 to £49,300.

In exceptional cases awards for injury to feelings may exceed £49,300.

Health and social care levy

Under the Health and Social Care Levy Bill 2021 – 2022 (which had its first reading in the House of Commons in September 2021), the government proposed imposing a 1.25% tax increase on National Insurance Contributions to cover the cost of health and social care. 

This increase will be introduced on 6 April 2022 and will apply to Class 1 employees’ and employers’ National Insurance Contributions.   It will remain in place temporarily pending the introduction of the levy in April 2023, which will be a separate, new tax.

If you would like any advice or support with any of the issues raised above, please contact Prettys Employment Team on 01473 232121 or submit an online enquiry or email us via enquiry@prettys.co.uk