April 2020: increase in limits for statutory payments and tribunal awards

April 2020: increase in limits for statutory payments and tribunal awards

April sees an increase in a number of rates and limits of relevance to employers, including compensation for unfair dismissal, redundancy 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 2020, the following minimum rates of pay will apply:

The National Living Wage for ages 25+ - £8.72 (up 6.2%)

The National Minimum Wage for:

21 to 24-year-olds - £8.20 (up 6.5%)

18 to 20-year-olds - £6.45 (up 4.9%)

Under-18s - £4.55 (up 6.4%)

For apprentices - £4.15 (up 6.4%)

Weekly pay

The value of a number of employment claims, including statutory redundancy pay, are calculated by reference to an employee’s weekly pay. This weekly pay is itself subject to a cap of a prescribed amount.

As from 6 April 2020, the prescribed cap on weekly pay will increase to £538. Consequently, statutory redundancy pay will increase, with the maximum payment increasing to £16,140.

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 2020 to £88,519 (or 52 weeks’ gross actual pay, if lower). These new figures will apply where the effective date of termination falls on or after 6 April 2020.

Statutory sick pay

From 6 April 2020 the rate at which statutory sick pay is paid will increase to £95.85 per week.

Statutory family-related leave

The prescribed rate for statutory maternity pay, adoption pay, paternity pay and shared parental pay will increase as of 6 April 2020 to £151.20 per week. The new right to statutory parental bereavement pay will also be paid at £151.20 per week.

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