David Leach looks at this year’s rate changes to Employment Law and other important updates.
New Financial Year – What are this year’s rate changes to Employment Law and other important updates.
We are now into the second week of April and there have been updates to rates related to pay and compensation. We have set out the updated figures below as well as some statistics from the Employment Tribunal on compensation awarded in 2019/2022 and some other important updates you will need to be aware off.
The annual increase to the national living wage (NLW) and national minimum wage (NMW) have taken affect from 1 April 2022.
The NLW has increased from £8.91 to £9.50 per hour. The updates to the NWM is set out below:
|Age Bracket||Old Hourly Rate||New Hourly Rate|
|Aged 21 to 22||£8.36||£9.18|
|Aged 18 to 20||£6.56||£6.83|
|Aged 16 to 17||£4.62||£4.81|
If you have any policies that normally contain the specific rates, these will need to be updated as soon as possible to reflect the changes. If you have not yet applied these rates, you will need to make sure that these rates are applied, to those it effects prior to any payroll runs for April. If you run any weekly payrolls and have yet to implement the minimum uplifts this will need to be rectified immediately.
Statutory Pay Rates
Some rates for the various rates of weekly Statutory Pay has increased from 3 April 2022 and 6 April 2022 respectively:
- Maternity, Adoption, Paternity and other Parental Leave Pay has been uplifted from £151.97 to £156.66
- Weekly Sick Pay has increased from £96.35 to £99.35 which took effect from 6 April 2022.
You will all be aware of the increase in National Insurance Contributions for both employers and employees. This has risen to 1.25%, the revenue that this increase will create is to be spent on the growing funding needs of the NHS and social care.
Gender Pay Gap reports
Employers who have more than 250 have, since 2018, been required to publish their annual gender pay gap report. For public sector employers, these reports were due on 30 March 2022. For any private sector and voluntary organisations this was due a bit after on 6 April 2022.
It has now been five years since the regulations were brought in force, so it is likely that the Government will undertake a review of the regulations soon, so it is highly recommended that employers keep an eye out for any updates this review will bring.
Employment Tribunal Compensation
Basic compensation and Vento bands have also been increased. These new rates take affect for termination that occurs on or after 6 April 2022.
|Weeks’ pay (used for redundancy calculation)||£571|
|Additional Award||26 to 52 weeks (£571 per week)|
|Dismissal related health and safety||No maximum|
|Dismissal related to making a protected disclosure (Whistleblowing)||No maximum|
|Dismissal related to a protected characteristic||No Maximum|
|Breach of Contract||£25,000|
While the maximum compensation award has increased, it will still be the lower of either 52 weeks gross pay or the statutory cap which will be awarded.
The Presidential Guidance on Vento Bands for Injury to feelings and psychiatric injury was published on 28 March 2022, these new rates will apply to any claim issued on or after 6 April 2022.
|Lower Band (less serious cases)||£990 to £9,900|
|Middle band (for cases that do no merit the upper band)||£9,900 to £29,600|
|Upper band (the most serious cases)||£29,600 to £49,300|
|For the most exceptional cases||In excess of £49,300|
Tribunal Award Statistics
HMCTS has yet to publish award statistics for 2020/2021 as a result of technical issues, we hope that these will be published soon.
The full report from 2019/2020 is available here.
|Claim||Maximum awarded||Median Award||Average award|
|Sexual Orientation Discrimination||£96,645||£9,245||£27,936|
*Please note that the Maximum award is in excess of the Statutory cap as the dismissal was due to one of the uncapped reasons.
David Leach is an Associate at Sharpe Pritchard LLP.
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