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Changes to Pay, Compensation and Statutory Payments

I can imagine a lot of business owners are frantically trying to get everything set up for the end of the current financial year and the beginning of the next.

If your leave year coincides with the financial year, this probably also includes making sure all staff have been able to take (or carry over where possible) any remaining holiday entitlement in good time without having an impact on current workload. 

As usual, the new financial year brings changes and I have set out a summary of the key employment-related changes for you.

National Living Wage for workers aged 21 and over will increase to £11.44.

National Minimum Wage for workers aged between 18 and 20 will increase to £8.60 per hour.

National Minimum Wage for workers aged between 16 and 17 will increase to £6.40 per hour.

Apprentice rate will also increase to a rate of £6.40 per hour.

From 6 April 2024, Statutory Sick Pay will increase from £109.40 per week to £116.75 per week.

The statutory maternity and adoption weekly pay rate (which follows the first 6 weeks at 90% of an employee’s normal weekly earnings) will increase from £172.48 to £184.03.

The same rate applies to those receiving statutory paternity pay, maternity allowance, shared parental and parental bereavement leave pay – £184.03 per week.

From 6 April 2024, the maximum statutory redundancy payment an employee can receive will increase to £21,000.

The maximum basic award for an unfair dismissal claim will also increase to £21,000.

When calculating an employee’s statutory redundancy entitlement, the maximum gross weekly pay will increase from £643 to £700.

From the 6 April 2024, the statutory cap on compensatory awards for unfair dismissal claims will increase from £105,707 to £115,115.

From 6 April 2024, the values of the three “Vento” bands used to assess an employee’s injury to feelings as a result of discrimination in the workplace will increase and is shown in the table below.

Vento BandClaims issued 6 April 2023- 5 April 2024Claims issued 6 April 2024- 5 April 2025
Lower band (less serious cases, such as where the act of discrimination is an isolated or one-off occurrence)£1,100 – £11,200£1,200 – £11,700  
Middle band (serious cases, which do not merit an award in the highest band)£11,200 – £33,700£11,700 – £35,200  
Top band (the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment)£33,700 – £56,200£35,200 – £58,700

As the statutory limit on a weeks’ gross pay is set to increase, the value of the sanctions for failing to give an employee a written statement of particulars setting out the terms and conditions of their engagement will also increase from 6 April 2024.

In light of this the limit on two weeks’ pay will increase to £1,400 (previously £1,286) and accordingly, the limit on four weeks’ pay will increase to £2,800 (previously £2,572).

The maximum award of 2 weeks’ pay for breaching an employee’s right to be accompanied to a grievance or disciplinary hearing will also increase accordingly.

We recommend that you review and update your internal processes including any forms and spreadsheets containing staff pay rates to reflect the changes to the rates of pay. It might also be worth having a meeting or a discussion with your accounts staff or your accountant who deals with payroll to ensure that they have up to date pay rates for all staff to avoid any administrational errors and inconvenience to staff. 

You may even wish to consider updating the employment contracts for current staff if these have not been updated for some time and to ensure that their pay meets the national minimum rates.

If you are in the midst of a reorganisation where redundancies are a likely outcome, we recommend you revisit any calculations to ensure that they reflect the increase in the maximum gross weekly pay.

If you wish to discuss these changes further, please do get in contact with us.  

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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