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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 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.

Embrace HR Aylesbury Statutory Sick Pay

Employees who have been off work with a long-term illness could still be paid Statutory Sick Pay when they return to employment, if proposals from a recent government Green Paper go ahead.

The Work, Health and Disability Green Paper revealed that sickness absence costs employers £9 billion a year, while the additional cost to the NHS of treating long-term health conditions that keep people out of work is estimated at around £7 billion per year.

Work, Health and Disability Green Paper

The Paper proposes a number of measures to help those with long-term health conditions get back to work.

Included in the Green Paper are recommendations for a review of Statutory Sick Pay and GP Fit Notes in order to help people get back into their jobs more quickly, and to stay there for longer. The aim is that these changes will help to encourage more supportive conversations between staff and employers and enable phased returns to work which, in the long term, should improved retention, employee engagement and productivity.

The proposals look at encouraging GPs to talk to people about what work they might be capable of doing, and for attitudes to change among employers, with the intention of encouraging more contact between employers and their sick employees.

This could see HR departments conduct a vital role in liaising with employees who are off work with long-term health problems, with a view to helping them to get back to work – perhaps on a part-time or remote basis.

In some cases where the return to work is phased, employees will still be able to claim sick pay once they are back at work.

At the moment, staff who may be entitled, can claim £88.45 a week in statutory sick pay if they are too sick to work for up to 28 weeks (see the gov.uk website). But that does mean that should they return to work part time – because it is all they can manage – they lose that sick pay, even though they are not earning a full-time wage.

This change could encourage people to go back to work earlier – doing what they can manage – even if that is a part-time role.

Health and Wellbeing

The move comes as part of a realisation that getting back to work can actually help people’s health and wellbeing. Health Secretary Jeremy Hunt said: “With all the evidence showing that work is a major driver of health, this is a big opportunity – to make sure that people get the support they need, improve their health, and benefit the NHS all at the same time. I hope that health professionals will contribute their expertise so that we can ensure the best possible outcomes.” 

Duncan Selbie, Chief Executive of Public Health England, commented: “Our health, wellbeing and happiness are inextricably linked to work. People in work generally have better health. So it makes perfect sense for the government to do all it can to support employers to close the gap around employment, disability and illness and to enable people to work when they can.”  

If you would like to discuss how the new Green Paper may affect your organisation and employees or to have a chat about your general HR requirements, please contact Cecily Lalloo at Embrace HR.

T: 07767 308717 or send a message.

Based in Aylesbury, Buckinghamshire, Embrace HR 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.