National Living and Minimum Wage
Every year there are rate increases for certain statutory pay entitlements in line with the Consumer Price Index. To help guide employers through the relevant changes, Price Bailey’s payroll and employment law team have produced a quick summary of the key statutory rates that are set to change.
National Minimum Wage
|Age||Date of change||Old rate||New rate|
|23+ years of age||1 April 2022||£8.91||£9.50|
|21-22 years of age||1 April 2022||£8.36||£9.18|
|18-22 years of age||1 April 2022||£6.56||£6.83|
|Under 18s||1 April 2022||£4.62||£4.81|
|Apprentice||1 April 2022||£4.30||£4.81|
Statutory rates of pay
|Statutory maternity pay, maternity allowance, statutory paternity pay, statutory adoption pay, and shared parental pay
|3 April 2022||£151.97||£156.66|
|Statutory sick pay (SSP)*||11 April 2022||£96.35||£99.35|
|Compensatory award for unfair dismissal
|6 April 2022||£84,493||£93,878|
|Week’s pay for calculating statutory redundancy and basic award||6 April 2022||£544||£571|
Other important payroll changes to note
- National Insurance (NI) – NI will increase in 2022-23 to include the Health and Social Care Levy, which is going to be set at 1.25%. This will automatically be processed via the payroll under the employees usual National Insurance deductions, from 2023-24 it is proposed that it will be shown separately as an independent deduction.
- Working from Home Allowances – certain allowances have been paid to many employees since the beginning of lockdown, at a maximum of £26 a month. From April 2022 the rulings will revert back to what they were prior to March 2020 and are far more restrictive on who can claim. More guidance can be found on the Gov.uk website.
- Employment allowance designed for smaller businesses is increasing to provide tax relief on the first £5,000 of annual Class 1 National Insurance Contributions from April 2022. The eligibility remains the same as the previous couple of years, where employers can claim back on employer National Insurance (NI) each tax year, provided their employer NI bill for the previous year was below £100,000. However, there are other eligibility factors to consider such as linking companies, de minimis state aid thresholds among other factors. If you are unsure if you are eligible, please contact our payroll team using the form below.
- From 6th July, there will be an increase to the Primary Threshold, which will be aligned to the tax personal allowance of £12,570.
Important employment law changes in April 2022
- Publish your gender pay gap report – Organisations with more than 250 UK employees are required to publicise their gender pay gap report this year. For public sector organisations, the deadline for this was 30 March 2022. Whereas, for private-sector and voluntary-sector employers, the deadline is 4th April 2022. Reports must be made public on websites and the gender pay gap reporting portal.
- Comply with the national minimum wage and statutory pay changes set out above – Employers are encouraged to check existing pay rates against the new national minimums to ensure that they increase remuneration accordingly.
- Review your organisation’s IR35 compliance – the 6th April 2022 marks a year since new rules saw the extension of IR35 rules to cover off-payroll working in the private sector. While it has been 12 months since this came into place, HMRC have announced that penalties for non-compliance (provided not evidently deliberate) will be fairly light touch while the industry adjusted. It is a good time, therefore, for business to review their compliance and make any necessary adjustments.
- Right to work checks – don’t get caught out – during the pandemic, employers were able to carry out document checks remotely using the online Home Office right to work service, given the restrictions that meant meeting in person was impossible. This measure was due to expire later this month – however, following review this measure has now been extended to September 2022, to make allowances for travel restrictions in other countries outside of the UK. A digital identity service is being introduced to enable British and Irish citizens to evidence their identity remotely, as a long term measure. The legislation allowing this is due to come into place on 6th April 2022 – although, whether the technology will be rolled out then, is not yet confirmed. Therefore, for now, a full manual document check still needs to be carried out.
There have been a number of temporary employment law adaptations made during the last two years, as a direct result of the Covid-19 pandemic. Many of these have been subject to review and some instances returning to their pre-pandemic status.
*SSP – For those not already aware, the ability for certain SME employers to be able to reclaim any SSP costs related to Covid-19 absence ceased for any absence occurring after 17th March, 2022.
Additionally, from 24th March, 2022 the Government has now reintroduced the three ‘waiting days’ before individuals can begin claiming SSP, whether the absence is relating to Covid-19 or not. You can read more about SSP relating to Covid-19 here.
If you are an employer, this is the perfect time to do a bit of housekeeping and review the rates that are in place at your Company or institution. This time of year is an opportunity to make any necessary contract and policy updates to make sure that everything is in line with the current national requirements.
This article was written by Claire Berry, an employment solicitor at Price Bailey. Should you need any help or guidance, please contact our teams using the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
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