Employers should be aware of various changes to employment rates coming into effect from April 2024.
The key changes are summarised below:
Minimum wage changes
The National Minimum Wage legislation sets out the minimum that employees and workers must be paid according to their age. In 2016 the National Living Wage (NLW) was introduced to introduce a new age category, originally to those aged 25 years and over.
The National Living Wage (NLW) and National Minimum Wage (NMW) are reviewed and updated annually and this year’s increases will take effect from 01 April.
The NLW is the statutory minimum employers must pay their workers who are aged 21 and above. Before this year, the NLW applied only to employees ages 23 and over. The NMW is the statutory minimum employers must pay for those of at least school leaving age.
The hourly rate wage increases are:
*Apprentices who are over 19 years old and have completed the first year of their apprenticeship are entitled to be paid the minimum wage for their age group, rather than the lower apprentice rate.
**Employers do not have to implement the increased rates of pay until the start of the next payment reference period following 01 April. So, if employees usually get paid on the 10th day of the month, the old rate will continue to apply until the 11 April.
Wages have been a hot topic recently, with BrewDog facing backlash for dropping their ‘real Living Wage’ pledge. The ‘real Living Wage’ is not a legal requirement, but is instead a rate set by the Living Wage Foundation based on the cost of living and is voluntarily paid by employers.
Action Point: Employers need to be prepared for the increases by updating their payroll and ensuring contracts for new staff are up to date. Those who underpay staff risk facing claims in the employment tribunal for non-payment of minimum wage and/or enforcement action from HMRC. They may also appear in the government’s annual list of employers named and shamed for not paying the appropriate minimum wage rates.
Statutory leave payments
Statutory family pay, including that for maternity, paternity, adoption, shared parental, and parental bereavement, will increase to £184.03 (from £172.48) from 06 April 2024 (or 90% of the individual’s weekly earnings if that amount is lower).
Statutory sick pay will be rising to £116.75 per week (from £109.40) on 06 April 2024.
Action Point: Employers should be prepared to ensure that staff on family-related or sick leave are paid at the new rates and update relevant policies and procedures where necessary.
Tribunal awards and calculations
The government has recently announced changes to the compensation limits for unfair dismissal and the statutory cap on a week’s pay used for calculations such as redundancy pay. The key changes are:
- The maximum compensatory award for unfair dismissal claims will increase to £115,115 (from £105,707);
- Statutory guarantee pay will increase to £38 per day (from £35 per day);
- The cap on the basic award for unfair dismissal claims and the maximum statutory redundancy payment rises to £21,000 (from £19,120); and
- The cap on a weeks’ pay will increase to £700 (from £643).
Action Point: Employers may need to revise redundancy pay calculations for any dismissals taking effect from 6 April.
Legislative updates
Also coming into force on 06 April 2024 are the following legislative changes:
- The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 will enhance protection for pregnant employees, and those on or returning from maternity, adoption, or shared parental leave who are facing redundancy.
- The Carer’s Leave Act 2023 gives employees who care for dependants with ‘long term care needs’ a new entitlement to one week’s unpaid leave on an annual basis to provide or arrange care for that dependant.
- The Employment Relations (Flexible Working) Act 2023 creates a day one right to request flexible working, instead of after 26 weeks. Employees will also be able to make two requests in a 12-month period, and the time period in which the employer must reply to a request will be reduced from 3 months to 2.
Action Point: Again, employers should ensure that those responsible for HR are aware of the new changes and update their policies and procedures accordingly.
For any advice and information on the above points or any employment issues please email our specialist Employment Law team here.