April 2023: changes to rates and limits for statutory payments and tribunal awards

April 2023: changes to rates and limits for statutory payments and tribunal awards

Changes to the Coronavirus Job Retention Scheme are announced

April 2023 sees an increase in a number of rates and limits of relevance to employers operating a payroll or providing expenses and benefits, including national minimum wage, statutory sick pay, statutory family leave pay, statutory redundancy pay and compensation for unfair dismissal.

Details of the most notable changes are below:

1. National Minimum Wage

From 1 April 2023, the following minimum rates of pay apply:

  • The National Living Wage for those aged 23 and above is £10.42 per hour (up 9.68%)
  • The National Minimum Wage for:
    • 21 to 22-year-olds (inclusive) is £10.18 per hour (up 10.89%)
    • 18 to 20-year-olds (inclusive) is £7.49 per hour (up 9.66%)
    • 16 to 17-year olds (inclusive) is £5.28 per hour (up 9.77%)
    • Apprentices under 19 (all) or 19 and over (in their first year) is £5.28 per hour (up 9.77%)

2. Statutory sick pay

From 6 April 2023, the rate at which statutory sick pay is paid will increase to £109.40 per week.

3. Statutory family-related leave

From 2 April 2023, the following prescribed rates of pay apply:

  • Statutory maternity pay or adoption pay for the first six weeks is 90% of average weekly earnings per week.
  • Statutory maternity pay or adoption pay for the remaining weeks is the lower of 90% of average weekly earnings or £172.48 per week.
  • Statutory paternity pay, shared parental pay and parental bereavement pay is the lower of 90% of average weekly earnings or £172.48 per week.

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.

From 6 April 2023, the prescribed cap on weekly pay will increase to £643. Consequently, statutory redundancy pay will increase, with the maximum payment increasing to £19,290.

5. 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 a similar way to 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 2023 to £105,707 (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 2023.

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