As both an employer and employee, it is important that you are aware of the annual rate changes in employment law, so you can ensure that the appropriate rates are being paid.
The 2023 changes will include the usual set of rate changes to take effect in April 2023, as follows: –
The National Minimum Wage and National Living Wage:
The new rates were announced in the Autumn Budget, and will come into force on the 1st April 2023. The rates will be as follows:
- For workers aged 23 and over, the rate (known as the National Living Wage) will increase by 9.7% from £9.50 per hour to £10.42 per hour.
- For workers aged 21-22 inclusive, the rate will increase by 10.9% from £9.18 per hour to £10.18 per hour.
- For workers aged 18-20 inclusive, the rate will increase by 9.7% from £6.83 per hour to £7.49 per hour.
- For workers aged 16-17 inclusive, the rate will increase by 9.7% from £4.81 per hour to £5.28 per hour.
- The apprentice rate will increase by 9.7% from £4.81 per hour to £5.28 per hour.
- The daily rate for the accommodation offset will increase by 4.6% from £8.70 to £9.10. However, unlike the above rates, the Real Living Wage and London Living Wage usually increase in November each year.
Statutory Maternity Pay, Statutory Paternity Pay, Shared Parental Pay, Adoption Pay, Maternity Allowance, and Statutory Parental Bereavement Pay:
The new rates for these payments came into effect on 2nd April 2023.
- The maximum rate (i.e. the cap) for all of these family friendly payments will increase from £156.66 to £172.48 per week, which means that those eligible will be entitled to the lower of £172.48 or 90 per cent of their average gross weekly earnings per week.
- The average gross weekly earnings required to qualify for all of the family friendly payments, except for Maternity Allowance, will remain at £123.00 or more.
- For Maternity Allowance, where an employee earns less than £123.00 per week on average, but was employed for 26 of the 66 previous weeks earning at least £30 per week (averaged over any 13 week period during the said 66 weeks), then they will qualify for the payments.
Statutory Sick Pay:
- The new rate came into force on 6th April 2023. The rate will increase from £99.35 to £109.40 per week.
Redundancy pay and unfair dismissal compensation:
The statutory weekly pay figure for redundancy payments and basic awards in unfair dismissal claims increase from £571 to £643 as from 6th April 2023. The maximum redundancy payment therefore increases to £19,290.
The cap on compensatory awards in unfair dismissal claims increases to £105,707 (from £93,878).
The above information is not intended to be a complete or definitive statement of the law. If you need assistance or further advice from an experienced employment lawyer, contact us today.
