Changes in Employment Law Rates and Limits

From the beginning of April 2022, there have been various changes to employment rates and limits. 

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

From 1 April 2022, the NLW and the NMW rates will be: 

• NLW rate – age 23 or over - £9.50 (up from £8.91). 
• Age 21 to 22 - £9.18 (up from £8.36). 
• Age 18 to 20 - £6.83 (up from £6.56). 

• Age 16 to 17 - £4.81 (up from £4.62). 
• Apprentice rate - £4.81 (up from £4.30). 
• Daily accommodation offset rate - £8.70 (up from £8.36). 

It is worth noting that the NLW and the NMW applies to most workers (with some exceptions). A worker is an individual who works under either (1) a contract of employment; or (2) a contract to personally do or perform work or services for another, provided that the other is not a customer or client of a profession or business undertaking carried on by the individual. Therefore, an individual who does not qualify for worker status (i.e. because they are self-employed) is not entitled to receive the NMW. 

Family leave 

From 3 April 2022, for statutory family leave, the following will apply: 

• Statutory maternity pay and statutory adoption pay – from week seven onwards, this will be either the prescribed rate which is now £156.66 per week (up from £151.97); or the earnings-related rate which is 90% of the employee’s normal weekly earnings, whichever is lower. 
• Statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay - the weekly rates will again either be the prescribed rate which is now £156.66 per week (up from £151.97); or the earnings-related rate which is 90% of the employee’s normal weekly earnings, whichever is lower. 

Statutory redundancy pay  

Employees who are made redundant and have two years’ continuous service are entitled to a statutory redundancy payment. From 6 April 2022, the cap on a week’s pay for redundancy calculation purposes increased to £571 (from £544). The overall maximum statutory redundancy pay therefore increased to £17,130 (from £16,320). 

Statutory Sick Pay (SSP) 

The SSP scheme entitles qualifying employees who have been absent from work for four or more consecutive days to receive a minimum weekly payment. To qualify for SSP, the employee must have average weekly earnings of not less than the lower earnings limit*. Employees are entitled to up to 28 weeks' SSP in any period of incapacity for work. From 6 April 2022, the SSP rate increased to £99.35 per week (from £96.35 per week). 

For eligibility purposes, the lower earnings limit increased to £123 per week (from £120 per week). 

Employment tribunals  

For dismissals taking place on or after 6 April 2022, the limit on a week’s pay for the purposes of calculating the basic award increased to £571 (from £544). The maximum compensatory award for a claim of unfair dismissal also increased to £93,878 (from £89,493). Please note that the statutory cap on the compensatory award is removed if an individual successfully pursues a discrimination claim.

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