Increases to National Living Wage, National Minimum Wage and Other Rates
Are you aware of the increases announced in the rates for the National Living Wage and National Minimum Wage?
From the start of April 2021, the National Living Wage (NLW) increases from £8.72 an hour to £8.91.
Businesses should take note of the change in the age band to which the NLW is applicable; 23 and 24 year-olds will now receive it.
National Minimum Wage rates will also increase for lower age brackets but at a slightly lower rate to reflect the current economic situation:
21-22 year olds from £8.20 to £8.36 per hour
18-20 year olds from £6.45 to £6.56 per hour
16-17 year olds from £4.55 to £4.62 per hour
Apprentices aged under 19 or over 19 and in first year of their apprenticeship, will see their rate rise from £4.15 to £4.30 per hour.
Statutory maternity pay and other associated rates
From 4th April 2021, the weekly rates of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay increase to £151.97
Statutory sick pay
From 6th April 2021, the weekly rate will increase to £96.35.
Statutory redundancy payments and unfair dismissal awards
These will also increase, as long as the effective date of termination is on or after 6th April 2021.
The increases are:
Maximum amount of a week's pay: rising from £538 to £544
Maximum basic award/ statutory redundancy payment increasing from £16,140 to £16,320.
Maximum amount of an unfair dismissal compensatory award: rising from £88,519 to £89,493
Minimum basic award for automatically unfair dismissals increasing from £6,562 to £6,634
The award for unlawful inducement relating to trade union membership or activities, or for unlawful inducement relating to collective bargaining increases from £4,294 to £4,321
The penalties for not paying the NMW/NLW can be significant so it is a good idea to make sure you have checked all your employees’ pay rates. A talk with a tax expert could ensure you are compliant with the new rates and avoid the attention of HMRC.