News & Views

Employment Limits Increases and Other Developments


salary ratesEach year, the government reviews the various limits applicable to sums payable or due in an employment context. It is important for employers to know about these changes to ensure that they are fully aware of their obligations – and the potential risks they face – with respect to their employees.

The new employment limits, which came into effect on 6 April 2016, are as follows:

  • A week’s pay (for use when calculating statutory redundancy payments and the basic award of a Tribunal claim etc) = £479 (was £475)
  • Maximum amount of compensation that can be awarded for unfair dismissal claims = £78,962 (was £78,335) or 52 weeks’ salary (whichever is lower)
  • Statutory maternity/paternity/adoption/shared parental pay = £139.58 (was £138.18) per week

April also saw the introduction of the new compulsory living wage of £7.20 as the single hourly rate for adults aged 25 or older. Also, the penalty that can be applied to employers who fail to pay the minimum wage has been increased to 200% of the amount by which a worker (or workers) has been underpaid.

Related to this, the rates of the minimum wage will also rise again on 1 October. Workers who are 21-24 will receive £6.95 per hour (increased from £6.70). Workers who are 18-10 will get £5.55 (previously £5.30) per hour. Workers aged 16-17 will receive £4 an hour (from £3.87) and apprentices will get £3.40 (from £3.30). The living wage introduced in April will not increase again in October.

On the subject of apprentices, with effect from 6 April, employer NICs are no longer payable on earnings up to the upper earnings limit for apprentices aged under 25.

For further information on these new employment limits, or any aspect of employment law or HR advice, please contact our Employment Law team on 01727 832830 or at employment@sherrards.com.

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