Statutory payment rate increases set for April 2023
From April 2023 employment rates and thresholds are set to increase. Considering the economic climate the UK are currently facing, in terms of both inflation and the cost of living crisis, these imminent increases are particularly significant.
As an employer, it is important to ensure that you are prepared ahead of the scheduled rate increases. Be sure to check that you are paying your employees the correct rate and update any contracts of employment as required to ensure compliance.
In following the recommendations of the Low Pay Commission, the government have increased both the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those at least school leaving age) to support lower paid workers.
The increases to be implemented from 1st April 2023 are as follows:
Apprentices | Apprentices (aged 19 or over & in first year of apprenticeship) | Under 18 | 18 to 20 | 21 to 22 | 23 and over | |
April 2022 | £4.81 | £4.81 | £4.81 | £6.83 | £9.18 | £9.50 |
April 2023 | £5.28 | £5.28 | £5.28 | £7.49 | £10.18 | £10.42 |
It is important to note that apprentices aged 19 or over who have completed the first year of their apprenticeship are entitled to the National Minimum Wage or National Living Wage for their age.
From 2nd April 2023, the new statutory rates for maternity pay, paternity pay, shared parental pay, adoption pay, and parental bereavement pay shall increase from £156.66 to £172.48 per week (or 90% of the employee’s average weekly earnings if this is less than the statutory rate).
In order to qualify for these types of parental pay, the employee must earn on average of £123.00 or more per week alongside other eligibility requirements.
This rate is payable for different lengths of time depending on the type of pay concerned. For further information on how many weeks each of these rates are payable for, please contact our employment team for further assistance.
With effect from 6th April 2023, the government will increase Statutory Sick Pay from £99.35 to £109.40 per week.
In order to qualify for Statutory Sick Pay, employees must earn on average £123.00 or more a week . Further, they must be classed as an employee and have done some work for you, and must have been ill for at least 4 day in a row (including non-working days).
A further increase set to take effect from the 6th April 2023 is the cap on a statutory week’s pay. This is a relevant factor when calculating statutory redundancy payments and the basic award element of an unfair dismissal claim, along with an employee’s length of service and age.
The current cap of £571.00 per week will be increased to £643.00. This means that both a redundancy payment and a basic award will each carry a potential maximum amount of £19,290.00.
The compensatory award element for an unfair dismissal claim is also subject to an overall cap of £93,878 and this cap will be increased to £105,707 (or 52 weeks’ gross salary if an employee’s annual earnings are lower).
Compensation for injury to feelings can be awarded in discrimination cases. The vento bands set the criteria when quantifying the award to be granted and this criteria is updated annually.
From 6th April 2023 the vento bands are set to increase as follows:
Date claim presented | Lower band (Less serious and one-off cases) | Middle band (Cases that do not merit an award in the upper band) | Upper band (Exceptionally serious cases) |
6th April 2022 - 5th April 2023 | £990 - £9,900 | £9,900 - £29,600 | £29,600 - £49,300 |
6th April 2023 - 5th April 2024 | £1,100 - £11,200 | £11,200 - £33,700 | £33,700 - £56,200 |
Contact Kelsey to discuss this further.
