April is typically an important month in the employment law calendar. It is the month where many employment law changes take effect. Below we set out the key changes.
Increases to the UK National Minimum Wage and National Living Wage
The Government has announced the rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1st April 2023. In doing so, it has accepted in full the recommendations of the Low Pay Commission.
The rates which will apply from 1 April 2023 are as follows:
|Rate from April 2023||Annual increase (£)||Annual increase (%)|
|NLW (23 and over)||£10.42||£0.92||9.7%|
|21-22 Year Old Rate||£10.18||£1.00||10.9%|
|18-20 Year Old Rate||£7.49||£0.66||9.7%|
|16-17 Year Old Rate||£5.28||£0.47||9.7%|
These rates represent the largest increase to the National Living Wage since its introduction in 2016.
Practically, businesses who have previously paid staff comfortably above the National Living Wage may now find that they are very close to the statutory minimums. It is important for employers to check that they are paying employees at least in line with the statutory minimums.
Increases to other statutory payments
Increases to other statutory payments that will come into effect early April are:
- Statutory Sick Pay – increases to £109.40 per week
- Statutory maternity, adoption, shared parental, paternity and parental bereavement pay – increases to £172.48 per week
- The limit on a statutory week’s pay will increase to £643 (up from £571). This means that the maximum statutory redundancy payment and unfair dismissal basic award will be £19,290
- The cap on the compensatory award for unfair dismissal will increase from £93,878 to £105,707
There is no doubt that this year’s increases are significant. These increases see a much-needed rise for many low paid workers in light of the cost-of-living pressures. Conversely, many firms are likely to find it a tough challenge, especially against the backdrop of increasing overhead costs. It remains to be seen whether we will see lower-level increases in 2024 in the event the rate of inflation starts to ease.
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