This month sees a number of new and amended employment laws taking effect. Courtesy of Hallmark Hulme Solicitors please find details of changes come into effect from April 2018.
The National Minimum Wage Increase
On 1st April 2018, the National Living Wage for workers aged 25 and over increased to £7.83 per hour. The National Minimum Wage rates also increased:
- from £7.05 to £7.38 for 21 to 24 year olds;
- from £5.60 to £5.90 for 18 to 20 year olds;
- from £4.05 to £4.20 for 16 and 17 year olds; and
- from £3.50 to £3.70 for apprentices.
Employers should ensure that their workers are being paid at least the minimum rate that applies to them and keep adequate records to show they are in compliance with the rules.
Statutory Payments for Time Off Work
The weekly rate of statutory maternity, paternity, adoption and shared parental pay rises from £140.98 to £145.18 for pay weeks commencing on or after 1st April 2018.
From 6th April 2018, the weekly rate of statutory sick also rises from £89.35 to £92.05.
Employers should make sure that workers are paid the statutory minimum rates and review and amend policies and documents accordingly.
Taxation of Termination Payments
A significant change to the rules on taxation of termination payments comes into force on 6th April 2018.
All payments in lieu of notice are now treated as earnings and subject to tax and national insurance contributions, whether contractual or not.
Employers should ensure that no payments in lieu of notice are treated as non-taxable. The rules will not affect terminations made before 6th April 2018.
New limits on statutory redundancy pay come into force on 6th April 2018.
Employers that dismiss employees by reason of redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount. The maximum amount has risen from £489 to £508.
The maximum compensatory award for unfair dismissal also increases to £83,682 (from £80,541) where the effective date of termination is on or after 6th April 2018.
Payments on Insolvency
The maximum payments on insolvency have also increased:
- Arrears of pay (8 weeks’ pay) - £4064
- Statutory Notice Pay (12 weeks’ pay) - £6096
- Holiday Pay (6 weeks’ pay) - £3048
- Statutory Redundancy Payment (30 weeks’ pay) - £15,240
Claire Cole (Head of Employment)
Luke Crocker (Trainee Solicitor)
For further advice of any of the above changes or any employment related matters, please contact Claire Cole on 01905 726600 or email Claire.firstname.lastname@example.org
The contents of this article are for purposes of general awareness only. They do not purport to constitute legal or professional advice. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.