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Embrace HR Statutory Pay rate rises

While many things in our world are unusual at present, one thing that never changes is the rate rises that come into effect each April. Read on to ensure you have the correct figures available when paying your April wages and salaries…

Wage and Statutory Pay Increases April 2021

As many of us watching the Spring Budget on 3 March concentrated on whether Chancellor Rishi Sunak would hit us with taxes to pay for the Covid support offered to workers, businesses and the self-employed over the past year, it might have been easy to miss the announcement of the annual rate rises for minimum wage and other statutory payments.

Essential for anyone dealing with payrolls and other human resource issues within the care sector, these need to be applied from various dates in April. The four rate rises are explained below.

First though, a brief explanation on the difference between the National Living Wage (NLW) and the National Minimum Wage: the National Minimum Wage (NMW) is the minimum rate of pay per hour which almost all workers are entitled to; whereas the National Living Wage (NLW) is slightly higher and applies to workers if they’re over the age of 23.

National Living Wage (NLW)

One point to make note of is that the age threshold has been reduced for the National Living Wage, so it now applies to those aged 23 and over, while the main adult rate is for those aged 22 and 23.

  • The National Living Wage rises to £8.91 on April 1 (a rise of 2.2% from £8.72).
  • For workers aged 21 and 22 the new rate is £8.36.
  • For those aged 18 to 20 the new rate is £6.56.
  • Under-18s can look forward to a new hourly rate of £4.62, while apprentices will receive £4.30.
Age 2020 rate 2021 rate Percentage increase
20-21 £8.20 £8.36 2%
18-20 £6.45 £6.56 1.7%
16-17 £4.55 £4.62 1.5%
Apprentice £4.15 £4.30 3.6%

Statutory Redundancy Pay Cap

A weekly pay cap is applied to Statutory Redundancy Pay, and any changes come into effect on 6 April 2021.

The cap is calculated in line with any changes that have occurred to the RPI (Retail Prices Index). So, if the RPI in the preceding September is higher, then the statutory weekly redundancy amount is increased by the same percentage.

At present the cap is set at £538, with the new maximum predicted to be £544.

Statutory Maternity Pay (SMP)

The flat SMP rate changes on the first Sunday in April. This year, the rate should rise to £151.97 (from £151.20) on 4 April 2021.

This rate is also the same for Statutory Adoption, Shared Parental and Paternity Pay.

Your employees should be paid 90% of their average weekly earnings for the first six weeks of their maternity leave. For the next 33 weeks, they should receive whichever is the lower – SMP or 90% of their average weekly earnings.

Statutory Sick Pay (SSP)

The rate for SSP will change on 6 April 2021 and should rise to £96.35 (from £95.85).

Employees are entitled to SSP if they are off sick for four or more days in a row and can claim SSP for up to 28 weeks.

If you would like to discuss this subject further, please contact Cecily Lalloo at Embrace HR Limited.

T: 01296 761288 or contact us here.

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Based in Aylesbury, Buckinghamshire, Embrace HR Limited provide a specialised HR service to the care sector, from recruitment through to exit.

Embrace HR Aylesbury key worker pexels-anna-shvets-3683098

How are you doing today?

Another weekend over. Is Nature / the Good Lord balancing things for us? In spite of the Coronavirus pandemic, hasn’t it been a wonderful weekend – weatherwise – for us in SW England?

I do hope this week will not present too many challenges to you and that you find support in everything you do.

Remote working 

Embrace HR blog picture

 

Following government guidelines, we are all working from our homes; but are carrying on with business as usual.

A VERY BIG THANK YOU to Maria, Deana and Bridgette, who are terrific in keeping the wheels turning.

Our office telephone has been placed on voicemail but we will pick up messages. Communication, however, is best by email, especially if it is urgent. Please email us at admin@embracehr.co.uk. 

ID Cards  

We have been issuing our client’s staff with the necessary ID required for them to be identified as Key Workers.

Please contact us if you would like more information.

Furlough Leave 

In these unprecedented and difficult times, the government has introduced a new scheme to help prevent redundancies called the Coronavirus Job Retention Scheme (CJRS). I have mentioned it in earlier blogs. But there has been a lot to take in so I don’t apologies for mentioning it again here.

The scheme is for businesses who do not have any work for their employees due to the Coronavirus situation. The scheme pays for 80% of the employees wages while they are not working. The scheme is currently running from 1 March to 31st May 2020. It is unknown at this time if the scheme will be extended. 

Legally, the employee will be placed on Furlough Leave which must be for a minimum of 3 weeks. Whilst on Furlough Leave the employee will remain employed by the company but must not work for their employer. They will accrue annual leave as usual.    

FAQs

These are some of the frequently asked questions we have received over the last few weeks:  

Can I Furlough my pregnant employee?  

If you have an employee who is pregnant and is due to go on maternity leave soon, it is possible to place them on Furlough Leave before they go. However, once they start maternity leave they will no longer be on Furlough Leave. 

Can I Furlough an employee returning from maternity leave?  

If you have an employee who is due to return from maternity leave during a period that other employees are on Furlough Leave, and you intend to designate the returner as a Furlough Worker, it is possible to place them on Furlough Leave when they were due to return to work.  

How do I decide who to Furlough?  

If you have a pool of staff who are all doing the same role, it may be difficult to decide who to Furlough and who to leave working. When making the decision, iis important to be aware of not discriminating against someone because, for example, they are disabled or pregnant. One option would be to offer the Furlough scheme on a voluntary basis. Another option would be to draw up a list of objective criteria to aid your decision.  

Changes to Statutory Benefits  

The National Minimum Wage (NMW) and National Living Wage (NLW)

From 1 April 2020 the changes are detailed below.   

National Minimum Wage 

 

2019  2020 
Employees over 25 years   £8.21  £8.72 
Employees aged 21-24 years  £7.70  £8.20 
Employees aged 18-20 years  £6.15  £6.45 
Employees aged under 18 years  £4.35  £4.55 
Apprentices  £3.90  £4.15 

Other Statutory Pay Increases 

  • Pay for Maternity, Adoption, Paternity, Shared Parental Leave increased to £151.20 on 5th April 2020.
  • Statutory  Sick Pay increased to £9.85 from today, 6th April 2020. 

Do you have any HR questions you need answered?

If so, do contact our Team at Embrace HR by using the contact form here or contact me on LinkedIn.

You can also find us at our Facebook Page EmbraceHR Support.

If you would like to receive our quarterly newsletter, please sign up here.

Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports SMEs and care packages who do not have their own HR department or those that do but need help from time to time. We also work across the Home Counties of Oxfordshire, Bedfordshire and Hertfordshire, and London.

Pictures are from Pexels.com