There are some important changes to statutory rates of pay that the Government have already announced, to take effect in 2022.
National Minimum/Living Wage Rate Increases
The National Living Wage is to rise by 6.6% which is the biggest cash increase ever. It will go from £8.91 to £9.50 per hour.
At the same time, the National Minimum Wage (NMW) rates will be increased as follows:
- from £8.36 to £9.18 per hour for 21 to 22-year olds;
- from £6.56 to £6.83 per hour for 18 to 20-year olds;
- from £4.62 to £4.81 per hour for 16 & 17-year olds; and
- from £4.30 to £4.81 per hour for apprentices;
If you provide some form of staff housing as part of the contractual arrangements, then the daily accommodation offset will apply. This will change from the current rate of £8.36 per day to £8.70.
Increased Statutory Rates
The rate for 2022/23 for Statutory Maternity (SMP), Paternity (SPP), Adoption (SAP), Parental Bereavement (SPBP) and Shared Parental (SShPP) Pay are set to increase from £151.97 to £156.66 per week.
Additionally, the rate of Statutory Sick Pay (SSP) is also set to increase from £96.35 to £99.35 per week.
The average earnings an employee has to earn to be entitled to these payments is set to increase from £120.00 to £123.00; this will be the first increase to this rate for two years.
Exact dates of implementation are still to be confirmed, and it is worth noting that they do not all usually increase on the same date. It is expected that SMP, SPP etc. will increase on 3 April 2022, and SSP will increase on 6 April 2022. The NLW and NMW rates go up from 1 April 2022.
The rates for Statutory Redundancy Pay, Statutory Guarantee Pay, and Tribunal Awards are not yet announced. We will send an update as soon as the new rates are published. They are expected in March.
Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.