Preparing for new HR laws: Statutory rates

Statutory payments have risen again.

And if you usually pay your staff on or around the national minimum wage, it's vital that you make sure you don’t accidentally slip below that legal limit.

To give you a recap on the new pay rates for April, here’s what’s changed:

National minimum wage

From 1st April, national minimum wage rates increased.

But not just that. This time around, minimum wage bandings also changed. Now, there is no longer a separate minimum wage band for the 21-22 year olds.

Instead, anyone aged 21 and over automatically joins the highest band for minimum wage.

You can make note of the new minimum pay rates below…

• For those over compulsory school age – £6.40 per hour
• For apprentices aged under 19 - £6.40 per hour
• Apprentices aged 19 or over in their first year - £6.40 per hour
• For those aged 18-20 - £8.60 per hour
• For those aged 21+ - £11.44 per hour

Family rights and pay

Next up, there are new pay rates for employees who are taking family leave.

So if this affects (or is soon to affect) any of your staff, you’ll need to increase their pay rate accordingly.

When your employees are taking any kind of family leave, in most cases you’ll need to provide them with statutory pay. Alternatively, you might offer your own enhanced company rates.

And whether this applies to any of your employees right now or not, it’s important to make sure you’re aware of your employee’s new legal minimum rights.

From 7th April, your employee’s family leave pay entitlements are as follows…

• Statutory maternity pay – 90% of their normal weekly pay for the first six weeks, followed by £184.03 or 90% of their normal weekly pay (whichever option is lower) for a maximum of 33 weeks
• Statutory paternity pay - £184.03 for a maximum of two weeks
• Statutory adoption pay – 90% of their normal weekly play for six weeks, followed by £184.03 or 90% of their normal weekly pay (whichever option is lower) for the next 33 weeks
• Statutory shared parental pay - £184.03 or 90% of their normal weekly play (whichever option is lower) for a maximum of 37 weeks
• Parental bereavement pay - £184.03 or 90% of their normal weekly pay (whichever option is lower) for a maximum of two weeks

(Note: an employee's entitlement to family leave pay is subject to eligibility requirements).

Statutory sick pay (SSP)

Provided your employees earn on or above the lower earnings limit (£123 per week), they have a right to statutory sick pay (SSP).

That’s if they’ve been ill for at least four days, including non-working days. You would normally start paying SSP from the fourth day your employee has missed work.

You might offer your staff the statutory rate or more – depending on your company rules.

Employees used to have a legal entitlement to £109.40 a week for a maximum of 28 weeks. From 6th April, the new rate of SSP is £116.75 a week (up to the maximum limit of 28 weeks).

Redundancy pay

Your employee has a right to statutory redundancy pay if they’ve worked for you for two years or more.

Under the Employment Rights Act 1996, they should receive:

• half a week’s pay for each full year they were under the age of 22
• one week’s pay for each full year they were 22 and over (up to and including the age of 40)
• one and a half week’s pay for each full year they were 41 or older

This weekly pay was capped at £643. And the maximum amount of statutory redundancy pay an employee could receive was £19,290.

But now, the cap on weekly pay is £700 and the maximum amount of statutory redundancy pay has risen to £21,000. So, you’ll need to be aware of this if you were ever in the position of making a redundancy.

Statutory guarantee pay (SGP)

If you lay off an employee or place them on short time working, you may need to offer them statutory guaranteed pay (SGP).

That’s if you’ve not given them any work to do for a full day and they’ve worked for you for at least a month.

The old rate of SGP was £35 per day. Now, it's £38 per day. (However, if your employee earns less than this standard rate in a day’s pay, you should pay them the amount they would usually earn instead.)

Employment tribunal compensation

Your employee could take you to tribunal if they believe you’ve unfairly dismissed them.

And if they’re successful in their claim against you, they could earn a hefty amount of compensation.

Employees used to win a basic award of £19,290 for an unfair dismissal claim. They could also earn compensatory and additional awards – depending on the extent of losses they’ve suffered.

The amount of compensation employees can receive for a basic, compensatory, and additional award increased from 6th April 2024.

And the new tribunal compensations are…

• Unfair dismissal - basic award – a maximum of £21,000
• Unfair dismissal - compensatory award – a maximum of £115,115 or 52 weeks pay (whichever option is lower)
• Unfair dismissal - additional award - £18,200-£36,400
• Breach of contract – amount equal to loss but a maximum of £25,000
• Failure to provide a statement of main terms – two or four weeks pay (subject to a £700 cap on week’s pay)

The compensation for discrimination in a dismissal also hasn’t changed. In these cases, an employee could receive unlimited compensation.

Speak to an expert directly

If you have any questions at all about how to manage new statutory rates, don't hesitate to speak to an HR expert directly. Just tap below to book in for a free advice call today.