Statutory employee entitlements to increase

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david-menzies By David Menzies, Director of Insolvency

22 March 2017

Changes to the national minimum wage, national living wage and other amounts to which employees may be entitled will increase in April. David Menzies reports on the changes being introduced.

The National Minimum Wage and National Living Wage limits will increase from 1 April 2017.

Workers aged 25 and over, and not in the first year of an apprenticeship, are legally entitled to at least the National Living Wage. Workers aged under 25, or an apprentice, are legally entitled to at least the National Minimum Wage. The National Minimum Wage and National Living Wage are set out in the table below:

Date

25 & over

21 to 24

18 to 20

Under 18

Apprentice

1 October 2016 (current rate)

£7.20

£6.95

£5.55

£4.00

£3.40

1 April 2017

£7.50

£7.05

£5.60

£4.05

£3.50

Further information is available from the Government’s Check your pay campaign website.

Statutory redundancy pay and employment tribunal awards

In addition, the maximum amount of statutory redundancy pay and the limit on the amount employment tribunals can award for unfair dismissal will increase from 6 April 2017. This increases every year in line with the retail prices index.

From 6 April 2017, the maximum weekly rate payable as statutory redundancy will be £489, increasing from £479. The maximum award of statutory redundancy pay also increases to £14,670 from £14,370. Where an employer is insolvent, employees will be subject to these limits in respect of claims which can be made from the Redundancy Payments Office, even if they are contractually entitled to a higher rate.

Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age.

The maximum compensatory award for unfair dismissal is also increasing to £80,541 from the current £78,962.

The increased rates apply where the date of redundancy or the effective date of termination is on or after 6 April 2017.

The new rates are set out in the Employment Rights (Increase of Limits) Order 2017.

Topics

  • Insolvency
  • Legislation

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