With the new tax year fast approaching, here’s an update on the annual changes to pay figures. These will come into force from April 2017 and employers and HR managers need to make sure their business is ready to remain compliant.
When an employee with two or more years’ service is dismissed for redundancy, the employer must make a statutory redundancy payment based on that employee’s weekly pay, the length of their service and age – this is unchanged.
However, what is changing is the rate at which statutory redundancy pay is calculated – an annual adjustment. Where the effective date of termination (i.e. dismissal) falls on or after 6th April 2017, the cap on weekly pay calculations will increase from £479 to £489 per week – effectively meaning that the top award of statutory redundancy pay increases to £14,670 – a rise of £300 up from £14,370.
The maximum compensatory award for ordinary unfair dismissal is also on the rise. From 6April 2017 this will increase from £78,962 to £80,541 and sits among a number of adjustments to awards that employment tribunals can make.
National Minimum and Living Wages
As well as pay relating to former employees, employers must also check that pay rates for the existing workforce are fully compliant and up to date.
From 1st April 2017, the National Minimum Wage increases for all age groups and sees those aged over 25 receive an increase in line with the Government’s National Living Wage.
Worker Age Group
Over 25 Years
21 – 24 Years
18 – 20 Years
Under 18 Years
*Aged under 19 or over 19 and in the first year or an apprenticeship
Mike Patterson is an industry ranked Employment and HR Law specialist at Berwins Solicitors