IGA News

HR Update: National Minimum Wage and Employment Statutory Payment Increases

HR Update: National Minimum Wage and Employment Statutory Payment Increases

29 March 2018

National Minimum Wage Increases

The Government increased the National Minimum and National Living Wage rates on April 1st 2018.

These changes include the largest increases in a decade for the rates that apply to 18-20 and 21-24 year olds, so more employers than ever will be directly affected by these increases, including those who currently pay above the minimum and those with apprentices.

The changes are:

  • The 25 and over rate (National Living Wage) will increase by 33 pence to £7.83 per hour
  • The rate for 21 to 24 year olds will increase by 33 pence to £7.38
  • The rate for 18 to 20 year olds will increase by 30 pence to £5.90 per hour
  • The rate for 16 to 17 year olds will increase by 15 pence to £4.20 per hour
  • The apprentice rate will increase by 20 pence to £3.70 per hour

It is a criminal offence for employers not to pay someone the National Minimum Wage or to falsify payment records.

Detailed information on the minimum wage, who is eligible for it and how to calculate it can be found here.

You can also use this calculator from the Government website as a guide to find out if you are paying the minimum wage.

Statutory Pay Increases

A number of employment related statutory awards and payments will also increase in April.

As of April 1st 2018, weekly rates of statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP) and statutory shared parental pay (ShPP) will all increase from £140.98 to £145.18.

From April 6th 2018, employees who are on leave due to illness will receive increased statutory sick pay (SSP) from £89.35 to £92.05.

Employment Tribunal Awards for successful dismissal claims will also increase from April 6th. The key increases are:

  • The maximum cap on the compensatory award for unfair dismissal to increase to £83,682 from £80,541 (or a year’s pay, whichever is lower)
  • The minimum basic award for certain unfair dismissals relating to health and safety, employee representative, trade union and occupational pension trustee reasons to increase from £5,970 to £6,203
  • The maximum statutory cap on a week’s pay to increase to £508 from £489
  • Compensation limits increase for guarantee payments from £27 to £28 per day

If you are not sure whether you are paying the correct wages or statutory payments to your staff, or need further HR assistance, please call the IGA member helpline on 0845 305 4230.