Recent UK National Minimum Wage and statutory pay increases

April 2021 ushered in numerous changes and adjustments to UK employment law and the statutory rights of individuals.  As always, it’s important for companies to remain up to date with this information to ensure that they comply.

 

Increases in the UK National Minimum Wage

At the beginning of April, the National Living Wage was increased from £8.72 to £8.91 per hour.  This amounted to an increase of 2.2%, equating to a pay rise of £345 for full-time workers who earn this rate.

The National Living Wage is the highest band of the National Minimum Wage for those aged 25 years and older. The more significant change to be aware of this year is that the age threshold was lowered for the National Living Wage. This means that employees who are 23 and 24 years old are now also protected, not just those who are over the age of 25.

For those currently aged 23 or 24 years old who are earning minimum wage, the impact is significant as the previous rate was £8.20, and the recent increase to £8.91 equates to a pay rise of 8.7%.

For individuals aged 21 to 22, the National Minimum Wage was increased to £8.36.  Those aged 18 to 20 saw an increase to £6.56 and the rate for workers between the ages of 16 and 17 rose to £4.62.

 

Increases in statutory redundancy pay in the UK

On 6 April 2021, new rules and limits were put in place for calculating an employee’s statutory redundancy pay.

Statutory redundancy pay is payable to any employee who is made redundant and has two or more years of service. When calculating the statutory redundancy pay, a combination of the employee’s age, length of service, and weekly salary is used.

When completing this calculation, a cap is placed on a week’s pay. For higher earners, this weekly pay cap imposes a significant limit on their statutory redundancy pay entitlement.  Until April 2020, the cap allowed for a maximum amount of £538 per week. However, on 6 April 2021, this amount was increased to a limit of £544 per week.

 

Increases in statutory sick pay and family-related pay in the UK

This month also saw an increase in statutory sick pay which is paid by the employer for up to 28 weeks. As of 6 April 2021, the statutory sick pay entitlement was increased from £95.85 per week to £96.35 per week.

From 4 April 2021, there was also an increase in the weekly rate of statutory maternity, paternity, adoption, shared parental, and parental bereavement pay. This weekly payment rose from £151.20 to £151.97 per week.

 

Conclusion 

Whilst some of the above changes are minimal, it is important that employers take note of the National Minimum Wage changes and the changes to other statutory rates to ensure that they continue to comply and make any necessary updates.

 

Feel free to contact us if you have any questions or need any legal advice regarding the recent changes in employment law relating to the National Minimum Wage and statutory pay.  You can call 0118 914 5622, or email us at info@dphlegal.com