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Employment law changes from April 2018

View profile for Chris Amys
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April is the time of year when several changes come into force affecting employers such as the National Minimum/Living Wage, statutory payments and compensation limits in the Employment Tribunals. There are also new rules about the taxation of termination payments coming into force.

National Minimum/Living Wage

From 1st April 2018, the hourly National Minimum/Living Wage rates will increase:

  • Workers aged 25 and over - £7.50 to £7.83
  • 21-24 - £7.05 to £7.38
  • 18-20 - £5.60 to £5.90
  • 16-17 - £4.05 to £4.20
  • Apprentice rate - £3.50 to £3.70

Statutory payments

The level of statutory maternity, adoption, paternity and shared parental pay increases from £140.98 to £145.18 from 1st April 2018.  Statutory Sick Pay (SSP) also increases from £89.35 to £92.05.

Redundancy

From 6th April 2018, the maximum statutory redundancy payment a redundant employee would be entitled to increases from £14,670 to £15,240.

For the purposes of statutory redundancy payments, the maximum amount of a week’s pay also increases from £489 to £508.

Employment Tribunal compensation limits

From 6th April 2018, the maximum compensatory award in an unfair dismissal case will increase from £80,541 to £83,682.

The maximum basic award (calculated in the same way as a statutory redundancy payment) also increases from £14,670 to £15,240.

Termination payments

A significant change comes into effect from 6th April 2018 whereby all payments in lieu of notice on termination, including when an employee’s Contract of Employment does not contain a Payment in Lieu of Notice clause (PILON) will be subject to tax and national insurance.

MFG Solicitors can advise on employment rights and help employers carry out their legal duties. For more information about how we could help you, please contact us.

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