Employment Law changes and increases to Statutory Pay Rates from April 2021

National Living Wage


New rates of the National Living Wage (NLW) and National Minimum Wage (NMW) came into force on 1 April 2021

The government accepted in full recommendations made by the Low Pay Commission at the end of October 2020.

Employers should have reviewed and implemented these changes. Employment Law advice is available where this is required.

The National Living Wage has increased by 2.2 per cent from £8.72 to £8.91, and will be extended to 23 and 24 year olds for the first time. By 2024 this will have come down to 21 years. For workers aged under 23, the Commissioners recommended smaller increases in recognition of the risks to youth employment which the current economic situation poses.

The new rates from 1st April are shown below


Previous rate

Rate from April 2021

Increase

National Living Wage

£8.72

£8.91

2.2%

21-22 Year Old Rate

£8.20

£8.36

2.0%

18-20 Year Old Rate

£6.45

£6.56

1.7%

16-17 Year Old Rate

£4.55

£4.62

1.5%

Apprentice Rate

£4.15

£4.30

3.6%

Accommodation Offset

£8.20

£8.36

2.0%

 

Statutory Pay Rates

Other statutory pay rates have also increased from 4th April unless specified otherwise.


Weekly rate/limit from April 2021

Statutory maternity pay, maternity allowance, paternity pay, shared parental pay, and adoption pay

£151.97 (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate)

Statutory parental bereavement pay

£151.97

Statutory sick pay (SSP)

£96.35 from 6th April 2021

 


Changes to Statutory Redundancy Pay

Employees are normally entitled to statutory redundancy pay when they have been employed for 2 years or more.

The statutory calculation is based on the following:

half a week’s pay for each full year you were under 22

one week’s pay for each full year you were 22 or older, but under 41

one and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years.

New limits on statutory redundancy pay came into force on 6 April 2021.

Employers dismissing employees for reasons 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. This amount is £544 from 6 April 2021.

Calculations for statutory redundancy payments should be made based on this maximum amount for redundancy dismissals on or after 6 April 2021.

It is recommended that employers seek employment law advice prior to embarking on a redundancy programme.