All change: new pay rates and limits as from April 2017

April sees an increase in a number of rates and limits of relevance to employers including compensation for unfair dismissal, redundancy pay, weekly pay, national minimum wage, statutory sick pay and statutory family leave pay. 

Details of the most notable changes are below:

National Minimum Wage
As from 1 April 2017, the following minimum rates of pay will apply:

  • National Living Wage (per hour) Age 25+: £7.50
  • Standard adult rate (per hour) Age 21-24: £7.05
  • Development rate (per hour) Age 18-20: £5.60
  • Young workers rate (per hour) Age 16-17: £4.05
  • Apprentice rate (per hour): £3.50

Weekly pay
The value of a number of employment claims are calculated by reference to an employee’s weekly pay (for example Statutory Redundancy Pay). This weekly pay is itself subject to a cap of a prescribed amount.

As from 6 April 2017, the prescribed cap on weekly pay will increase to £489.

Consequently, Statutory Redundancy Pay will increase from 6 April 2017, with the maximum payment increasing to £14,670.

Compensation for unfair dismissal
Compensation for unfair dismissal claims is split into a “basic” award and a “compensatory” award. The basic award is calculated in the same way as Statutory Redundancy Pay and will therefore increase as described above.

The compensatory award is calculated by reference to the claimant’s loss of earnings, subject to a statutory cap. The cap on the compensatory award for ordinary unfair dismissal claims will increase as of 6 April 2017 to £80,541 (or 52 weeks’ gross actual pay, if lower).

SSP
From 6 April 2017 the rate at which Statutory Sick Pay is paid will increase to £89.35 per week.

SMP, SAP, SPP and ShPP
The prescribed rate for Statutory Maternity Pay, Statutory Adoption Pay, Statutory Paternity Pay and Shared Parental Pay will increase as of 2 April 2017 to £140.98 per week.

Contact our experts for further advice

Frances Rollin

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