Employment Law Changes To Take Place In April

With less than 2 weeks to go, here are the Employment law changes coming into force in April!

National Minimum Wage

From 1 April the rates of National Minimum Wage (NMW) will be as follows:

• National Living Wage (NLW) (21 and over): £12.21 (6.7% increase).
• 18-20 year old rate: £10.00 (16.3% increase).
• 12-17 year old rate: £7.55 (18% increase).
• Apprentice rate: £7.55 (18% increase).
• Accommodation offset: £10.66 (6.7% increase).

Changes to NMW may come as detriment to employers, bringing with it increased labour costs, which pose problems for profitability. For employers finding themselves worrying about the changes, it may be worth considering price increases, exploring outsourcing or engaging part-time workers, and improving operating efficiencies.

If an employer fails to pay the minimum wage, then they will need to pay the worker back in arrears. Additionally, they could be required to pay a penalty enforced by the government of up to 200% of the arrears capped at £20,000 per employee. It is recommended that employers undertake a yearly review of their pay, to ensure that they remain legally compliant.

Statutory Redundancy Pay and Unfair Dismissal

From April 6, the maximum of ‘a week’s pay’ for the purpose of calculating a redundancy payment or for various awards (including the basic or compensatory award for unfair dismissal) will increase from £700 to £719.

This in turn means that the limit on the amount of compensatory award payable for a successful unfair dismissal claim will increase from £115,115 to £118,223.

Neonatal Care Leave

Families with babies in neonatal care will be entitled to additional time off as a day one right.

Leave will apply to parents of babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of 7 full days or longer. These measures will allow eligible parents to take up to 12 weeks of leave on top of any other leave that they are entitled to, including maternity and paternity.

This measure is being introduced as part of Labour’s Plan for change and sets out to ensure that employed parents can focus on supporting their new family without worrying about losing their job.

Statutory Sick Pay

From the 6 April, people on who find themselves ill will either receive 80% of their average earnings or the rate of Statutory Sick Pay (SSP) which will be £118.75 per week, whichever is lowest.

Read our full article here- Employment Law Update: Changes To SSP Entitlement : Wilson Browne

National Insurance Contributions

The rate at which employers contribute to NICs will rise from the current 13.8% to 15%. This means that for every £1 paid in salary above the threshold, employers will now contribute 15p in NICs.

In addition to this there will also be a reduction in the Secondary Threshold. The earnings threshold at which employers start paying NICs will decrease from £9,100 to £5,000 per annum. Consequently, a larger portion of employees’ salaries will be subject to employer NICs.

Lastly, to support smaller businesses, the Employment Allowance will increase from £5,000 to £10,500. The £100,000 eligibility threshold for this allowance will be removed, allowing more businesses to benefit. These changes will result in higher employment costs for businesses. Therefore, it may be worth taking actions such as:

• Reviewing payroll budgets
• Utilising employee allowance
• Consulting with a financial advisor

If you are interested in further information about any of the changes outlined above, feel free to contact a member of the Employment team for a free initial call!