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Changes in employment law

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This April brings a number of changes to employment law, including a rise in the National Minimum Wage (NMW) and an increase in the statutory cap on unfair dismissal compensatory awards.

As of the first of the month, the NMW for workers aged 25 and over increased from £7.20 to £7.50 per hour, while the cap on a week’s pay, which, amongst other things, is used in statutory redundancy pay calculations, has also increased, from £479 to £489.

Meanwhile, from the start of the new tax year on 6 April, the statutory cap on unfair dismissal compensatory awards rose from £78,962 to £80,541, although the cap will be one year of the employee’s gross salary if this is lower.

Since July 2013, the maximum compensatory award for unfair dismissal is the lower of the statutory cap or 52 weeks’ gross pay for the employee, calculated at the time of their dismissal.

Therefore, this increase will have no impact for lower paid employees, but employers face a greater potential bill in respect of higher paid employees dismissed after 6 April this year.

Another increase for employers to manage is the weekly amount of statutory maternity, paternity and adoption pay, as well as statutory shared parental pay, all of which increased at the start of this month, for the first time in two years, from £139.58 to £140.98.

In addition, the rate of statutory sick pay increased from £88.45 to £89.35 per week from 6 April. The amount an employee has to earn per week to receive the statutory payments has also increased, from £112 to £113.