Changes to National Minimum Wage, statutory rates of pay and compensation

National Minimum Wage

For those aged 23 and over, the national living wage has increased from £8.91 to £9.50 per hour.

New rates for the national minimum wage are as follows:

• NMW 21 to 22 year old rate will increase from £8.36 to £9.18 per hour
• NMW 18 to 20 year old rate will increase from £6.56 to £6.83 per hour
• NMW 16 & 17 year old rate will increase from £4.62 to £4.81 per hour
• NMW apprentices will increase from £4.30 to £4.81 per hour

Statutory Benefits

Statutory sick pay is increasing from £96.35 to £99.35 per week.

Statutory maternity, paternity, shared parental and adoption pay increases from £151.97 to £156.66 per week.

Tribunal Compensation

The annual Employment Tribunal award limit changes apply to dismissals occurring on or after 6 April 2022.

The limit on compensatory award for unfair dismissal rises from £89,493 to £93,878.

The cap on the compensatory award is the lower of the compensatory award limit or 52 weeks’ pay (based on a claimant’s gross salary prior to dismissal including employer pension contribution but excluding benefits in kind and discretionary bonus).

There are a limited number of exceptions where the cap does not apply. These are dismissals for whistleblowing or for raising certain health and safety issues. In addition, there is no limit to the award that can be made where a dismissal is related to unlawful discrimination.

The limit on a week’s pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) increases from £544 to £571 meaning the maximum basic award and maximum statutory redundancy payment increases to £17,130.

Injury to Feelings Awards

The Court of Appeal previously set out guidance for quantifying awards for injury to feelings in discrimination cases, known as the Vento bands. For claims presented on or after 6 April 2022 the bands are as follows:

• Lower band (less serious cases) – £900 to £9,900
• Middle band (for cases that do not merit an award in the upper band) – £9,900 to £29,600
• Upper band (for most serious cases) – £29,600 to £49,300

Awards of more than £49,300 will only be made in the most exceptional of cases.

Please contact Bermans Employment team if you have any enquires.