As you would have already been aware, April 2021 saw some pay changes for employers. This included changes to limits in:
- Compensation for unfair dismissal.
- Redundancy pay.
- National minimum wage.
- Statutory sick pay.
- Statutory family leave pay.
As an employer, it’s essential for you to be aware of these pay changes. This ensures you are offering your staff exactly what they’re entitled to. Explore our comprehensive guide detailing these key pay changes, ensuring you make informed decisions for your employees. If you’re interested in professional support for managing organisational changes effectively, explore our Change Management services.
Navigating the changes: a comprehensive guide for employers
Changes in Pay Rates Effective from April 2021:
Now, let’s delve into a breakdown of the new minimum rates, applicable from 1st April 2021:
Breaking it down further, these new rates are as follows:
– The National Living Wage for ages 23+: £8.91 (up 2.2%).
Now, let’s turn our attention to the National Minimum Wage:
21 to 22-year-olds – £8.36 (up 2%)
18 to 20-year-olds – £6.56 (up 1.7%)
Under-18s – £4.62 (up 1.5%)
For apprentices – £4.30 (up 3.6%)
Weekly pay:
Moreover, employee claims, such as statutory redundancy pay, are influenced by their weekly pay. A prescribed cap limits this weekly pay.
From 6 April 2021, the prescribed cap on weekly pay will increase to £544. As a result, statutory redundancy pay will increase with the maximum payment increasing to £16,320.
Understanding Compensation for Unfair Dismissal:
Compensation for unfair dismissal claims is split into two: The basic award is calculated in the same way as statutory redundancy pay and will, therefore, increase as described above.
The compensatory award, subject to a statutory cap, is calculated by reference to the claimant’s loss of earnings. This cap on the compensatory award for ordinary unfair dismissal claims will increase as of 6 April 2021 to £89,493 (or 52 weeks’ gross actual pay, if lower). It’s important to note that these new figures will apply where the effective date of termination falls on or after 6 April 2021.
Statutory sick pay (SSP):
From 4 April 2021 statutory sick pay will increase to a rate of £96.35 per week.
Statutory family-related leave:
The prescribed rate for statutory maternity pay, adoption pay, paternity pay and shared parental pay will increase as of 4 April 2021 to £151.97 per week. Employers will also pay this new right to statutory parental bereavement pay at £151.97 per week.