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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.

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

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

Embrace HR Aylesbury Furloughed workers pexels-andrea-piacquadio-3796810

New rules will ensure that furloughed employees are not ‘short-changed’ if they are made redundant…

The government has introduced new rules that will protect furloughed workers in the event of redundancy.

The changes, introduced on 30 July 2020, will see employees receiving statutory notice pay calculated using their normal wages, not their furloughed rates of pay.

In the case of any future unfair dismissal claims, potential settlement would also be based on their pre-Covid wages, not the furlough rate they have been receiving.

Business secretary Alok Sharma said: “New laws coming into force will ensure furloughed workers are not short-changed if they are ever made redundant – providing some reassurance for workers and their families during this challenging time.”

The announcement follows on from the Job Retention Bonus plan, which was announced in the Mini Budget in July. The scheme has been designed to help stop mass redundancies as the Coronavirus Job Retention Scheme (JRS) winds down. It could cost the government as much as £9bn.

The plan will see each company paid £1,000 for each person that returns to work from furlough.

The bonus will be paid for staff who return to work between November and January – and who are paid at least £520 per month.

Employers encouraged to take on young staff

Also announced by Chancellor Rishi Sunak in the Mini Budget was a £2bn ‘kickstart scheme’ aimed at creating jobs for young people – dubbed the ‘new lost generation’ in the wake of the coronavirus pandemic.

The scheme is part of an emergency package designed to stop mass unemployment as the UK economy is hit by the effects of lockdown.

Young people aged 16-24, on Universal Credit and at risk of long-term unemployment, will receive six-month work placements funded by the government.

These kickstarter jobs will cover 25 hours’ work each week at the National Minimum Wage (that is, £4.55 for those under 18, £6.45 for young people aged 18 to 20, and £8.20 for the 21-24-year-olds). These payments can be topped up by employers who must offer training and support the young people in finding permanent employment to qualify.

Employers can apply for the scheme, which covers Wales, Scotland and England now, with jobs expected to start in the autumn. The scheme will run until December 2021, with the possibility of an extension. The government has pledged funding for a similar scheme for Northern Ireland.

The scheme could provide hundreds of thousands of jobs as no limit has been placed on numbers.

Apprentices and trainees

The government has also devised a scheme to increase apprenticeships, with employers being paid £2,000 for every apprentice they take on (the sum drops to £1,500 if the apprentice is aged 25 or over).

It has also promised to create 30,000 traineeship opportunities in England for young people aged 16 to 24. These are not paid positions, but instead offer unpaid work experience along with lessons in maths, English, and CV writing. They last from six weeks to six months and companies in England will be given £1,000 for each new work experience place they offer. A £21m fund will offer similar schemes for Northern Ireland, Wales, and Scotland.

Companies are required to offer the young people an interview for a job or apprenticeship if available at the end of their traineeship.

If you would like to discuss this subject further and find out how we could help you navigate these new government schemes, please contact Cecily Lalloo at Embrace HR Limited.

T: 01296 761 288 or contact us here.

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

Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports business owners 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 also SMEs based in London.

Embrace HR Aylesbury changes April 2019

It’s vital that HR professionals keep up to date with changes in the law – here’s a rundown of the most recent updates…

Itemised pay statements

The right to receive an itemised pay statement has been extended to workers, rather than just employees from 6 April 2019.

If you have staff whose pay varies depending on the hours worked, the pay statement will have to include the total number of hours worked as well.

There are two ways to show this: it can be included either as an aggregate figure or as separate figures for different types of work.

Increase to National Minimum Wages

Both the National Minimum Wage and the National Living Wage have risen as of 1 April 2019. Hourly rates are now as follows:

 

Under 18

18-20

21-24

25 and over

National Minimum Wage

£4.35

£6.15

£7.70

National Living Wage

£8.21

Apprentices now receive £3.90 an hour and a daily accommodation offset of £7.55.

Statutory sick and family pay

The rate for statutory maternity, paternity, adoption and shared parental pay has also increased. From 7 April 2019, it has upped to £148.68 a week.

Statutory sick pay has increased to £94.25.

Remember to update any of your policies or documents that mention these rates.

Statutory redundancy pay calculations

There are also new limits on statutory redundancy pay. Members of staff who have been employed for two years and are made redundant must be paid based on their weekly pay, length of service and age. The maximum weekly pay is now £525.

Employment tribunal award limits

Likewise, the limits on tribunal awards and other amounts payable under employment legislation has increased. The maximum amount of a week’s pay for calculating the basic award for unfair dismissal is now £525, and the maximum amount for unfair dismissal has upped to £86,444.

Pension contributions

The minimum amount for auto enrolment has increased since 6 April – to 8% of an employee’s qualifying earnings, with at least 3% coming from employers, with employees making up the difference.

It is also important to note that employers must complete re-enrolment every three years. The date for this will depend on your original staging date.

If you would like to discuss any of the above points further, please contact Cecily Lalloo at Embrace HR Limited.

T: 01296 761 288 or contact us here.

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

Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports business owners 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 also with SMEs based in London.