What’s on the Horizon?

Published February 03 2021

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We take a look ahead at some developments that employers may find it helpful to be aware of.

1. National Minimum Wage Changes

Not only does April see the annual increase to the National Minimum Wage rates but this year there is also a change to the age bands with workers who are 23 and over becoming entitled to the National Living Wage rate for the first time. With this in mind, it will be especially important for employers to plan ahead and identify those workers who are entitled to a pay increase to ensure National Minimum Wage compliance.

From 1st April 2021 the National Minimum Wage rates per hour will be:

  • National Living Wage (workers aged 23 and above): £8.91
  • 21-22 year olds: £8.36
  • 18 – 20 year olds: £6.56
  • 16 – 17 year olds: £4.62
  • Apprentice rate: £4.30

2. Statutory Rates

The government has announced the proposed increase to statutory payment rates for family leave. Increases normally occur on the first Sunday in April, which would be 4th April this year. Where an employee meets the qualifying conditions for the payment(s):

  • Statutory Maternity Pay / Statutory Adoption Pay – first 6 weeks paid at 90% of normal weekly earnings then 33 weeks at £151.97 (or 90% of normal weekly earnings if this is lower)
  • Statutory Paternity Pay, Statutory Shared Parental Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay – £151.97 per week (or 90% of normal weekly earnings if this is lower)

The government has also proposed to increase Statutory Sick Pay (SSP) from £95.85 a week to £96.35 a week on 6th April 2021.

3. Furlough

Many employers will be aware that following a further extension, the furlough scheme will continue until the end of April.

The government has now published a further Treasury Direction governing the operation of the furlough scheme. As the Scheme will have been running for a year in March 2021 the government has had to alter the reference salary rules for some of those on variable pay.

As an employee furloughed in March or April 2021 could potentially have been furloughed in the corresponding month in 2020, the latest Treasury direction modifies the corresponding calendar month period used for calculating the March and April 2021 furlough pay for variable pay employees whose relevant reference day is 19 March 2020. Instead of taking the corresponding month in 2020, employers should refer back to the employee’s pay in March and April 2019. (A change has also been made to the ‘usual hours’ calculation for these employees to avoid similar issues arising). Furlough agreements for these employees may need to be updated to take account of the change, such as where the method of calculation of the employee’s reference salary is set out in the agreement.

As we move closer to the time the furlough scheme is expected to end, it will be important for employers to keep up to date on what further support, if any, is made available.

If an employer wishes to take action in relation to an employee such as entering into a furlough agreement, changing a furlough agreement or proposing redundancies it will be important to seek advice from Kingfisher Professional Services Ltd on the facts of their situation before doing so.

4. Employment tribunal rates and limits

An increase is expected to certain tribunal rates and limits such as the financial award for compensation for unfair dismissal and the limit on a week’s pay that is used for calculating certain payments, such as statutory redundancy pay. The new rates have yet to be announced, but we will keep you up to date with any developments.

If you have an employment law matter you would like assistance with please do not hesitate to contact Kingfisher Professional Services Ltd as we are happy to help.