Legal News | 27.03.23
Employment Law Update 2023
With the new financial year starting next month, we have compiled the changes that employers should be looking out for.
Changes to the National Minimum Wage and National Living Wage
Applies from 1 April 2023.
|£10.42||National Living Wage (23 and above)|
|£10.18||21 to 22|
|£7.49||18 to 20|
Changes to Compensation Limits
Introduced on 6 April 2023.
|Maximum guarantee payments||£35 per day (maximum £175, five days in any three-month period)|
|Maximum week’s pay for calculating redundancy and unfair dismissal basic award||£643|
|Maximum basic award for unfair dismissal and statutory redundancy payment||£19,290 (30 weeks’ pay subject to the limit on a week’s pay)|
|Minimum basic award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only||£7,836|
|Maximum compensatory award for unfair dismissal (unlimited for certain automatically unfair dismissals, for example, health and safety or whistleblowing)||£105,707|
Changes to Statutory Rates
Statutory Rates for those having children are as follows from 2 April 2023:
|Statutory Maternity Pay – first 6 weeks||90% of the employee’s average weekly earnings|
|Statutory Maternity Pay – for the remaining weeks||£172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower|
|Maternity Allowance – not entitled to Statutory Maternity Pay|
|Statutory Paternity Pay||£172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower|
|Statutory Adoption Pay – first 6 weeks||90% of the employee’s average weekly earnings|
|Statutory Adoption Pay – for the remaining weeks||£172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower|
|Statutory Shared Parental Pay||£172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower|
|Statutory Parental Bereavement Pay||£172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower|
For the purposes of calculating Statutory Redundancy Pay, a week’s pay will be capped at £643 per week from 6 April 2023. The total amount payable will be based on the number of years of completed service, multiplied by the lower of the actual weeks’ pay, of the cap, and a multiplier of ½, 1 or 1 ½ for each year of service, depending on the age of the employee in that same year.
Statutory Sick Pay will be payable at £109.40 per week from 6 April 2023. Although this is the same for all employees, the amount you must actually pay an employee for each day they are off work due to illness depends on the number of qualifying days they work each week.
Changes to Employment Allowance
Employment Allowance allows eligible employers to reduce their annual National Insurance liability. This remains the same at £5,000 for 2023 to 2024.
Changes to the Apprenticeship Levy
Employers with a total annual pay bill of over £3million are liable to the Apprenticeship Levy. This is payable monthly. Employers who are not connected to another company or charity will have an annual allowance that reduced the amount of Apprenticeship Levy they have to pay. The Apprenticeship Levy is charged at a percentage of their annual bill.
For 2023 to 2024, the following apply:
- Apprenticeship Levy Allowance is £15,000
- Apprenticeship Levy charge of 0.5%
Increases in the Social Care Levy
The Health and Social Care Levy was abolished in 2022, reversing the 1.25% increase in National Insurance contributions.
|National Insurance Class||Who pays|
|Class 1||Employees earning more than £242 a week and under State Pension age - likely to be deducted by the employer|
|Class 1A and 1B||Employers pay these directly on their employee’s expenses or benefits|
|Class 4||Self-employed people earning profits of £11,909 or more a year|
Additional bank holiday for the coronation of King Charles III
There will be a bank holiday on 8 May 2023 to celebrate the coronation of King Charles III.
Where part-time employees are concerned, holiday pay should be calculated pro-rata to ensure fairness between full-time and part-time employees.
For further information, or for advice in relation to an employment or HR matter please contact the relevant team: