April 2022: Changes to statutory rates of pay and National Minimum Wage

April traditionally brings changes to National Minimum Wage Rates and statutory pay rates. This year there is also an increase to National Insurance Contributions (NICs) to remember.

We set out below the changes for the financial year 2022/2023:

National Minimum Wage

Following the advice of the Low Pay Commission, the government will increase the National Minimum Wage rates from 1 April 2022 as follows:

The National Living Wage (which since 2021 has applied to those aged 23 and over) will increase to £9.50 (up from £8.91). The minimum hourly rate for 21-22 year olds will increase to £9.18 (up from £8.36). The minimum hourly rate for 18-20 year olds will increase to £6.83 (up from £6.56). The minimum hourly rate for 16-17 year olds will increase to £4.81 (up from £4.62). The apprentice rate (for those under 19 years or those over 19 in their first year of apprenticeship) will increase to £4.81 (up from 4.30). The accommodation offset rates will also increase, with a daily rate of £8.70 (up from £8.36) and a weekly rate of £60.90 (up from £58.52).

National Insurance Contributions

From 6 April 2022, NICs for both employers and employees will increase by 1.25% in order to provide additional funding to health and social care services.

At the time of writing, despite growing pressure on the government to abandon plans to increase NICs it seems there is no intention to do so.

Statutory Sick Pay

From 6 April 2022, the rate of Statutory Sick Pay (SSP) will increase to £99.35 per week (up from £96.35 per week).

For the first time in two years, the minimum average weekly earnings required to qualify for SSP will increase to £123 per week (up from £120 per week).

Family-related Pay

From 3 April 2022, the rates for Statutory Maternity, Paternity, Adoption, Parental Bereavement, and Shared Parental Pay, are set to increase to £156.66 per week (up from £151.97 per week); the employee will only be entitled to the lesser of 90% of their normal weekly earnings and this new weekly rate (with the exception for Statutory Maternity Pay and Statutory Adoption Pay, where 90% of normal weekly earnings is guaranteed for the first six weeks).

As with SSP, for the first time in two years, the minimum average weekly earnings required to qualify for these family-related payments will increase to £123 per week (up from £120 per week).

Compensation Limits – Statutory Redundancy Pay and Unfair Dismissal

At the time of writing, changes to tribunal awards for successful claims have not been announced. Updates to these compensation limits are expected in the coming weeks.

What do you need to do?

To avoid a breach of National Minimum Wage legislation and potentially being named and shamed, you should ensure that the rates of pay in your organisation from April are compliant with the increases to the National Minimum and National Living Wage rates. Also remember the changes to the Statutory rates of pay and the increase to NICs from April and ensure that payroll is implementing all of these changes.

To discuss how any of these changes affect you or your organisation, please contact a member of our Employment team.

This article contains a general overview of information only. It does not constitute, and should not be relied upon, as legal advice. You should consult a suitably qualified lawyer on any specific legal problem or matter.