From 6 April 2021, there will be increases to various employment related limits. The key changes include:
1. The statutory limit on a week’s pay used for calculating an unfair dismissal basic award and also for calculating a statutory redundancy payment will increase from £538 to £544;
2. The maximum basic award for unfair dismissal (calculated according to a formula based on the employee’s age, length of service and weekly pay (capped as above)) will increase from £16,140 to £16,320;
3. As the calculation for a statutory redundancy payment mirrors the calculation for a basic award, the maximum statutory redundancy payment consequently will increase to £16,320; and
4. The statutory upper limit (or “cap”) on the maximum compensatory award for unfair dismissal will increase from £88,519 to £89,493 (the maximum compensatory award is the lower of 52 weeks’ pay or the statutory cap).
National minimum wage
National minimum wage rates will also increase with effect from 1 April 2021 as follows:
1. The National Living wage which has applied to workers aged 25 and over since 2016 will be extended to 23 and 24 year olds from 1 April 2021 and will increase from £8.72 to £8.91;
2. For workers aged 21 to 22, the standard adult rate of the national minimum wage will increase from £8.20 to £8.36;
3. Workers aged 18 to 20 who receive the development rate of the national minimum wage will see hourly pay increased from £6.45 to £6.56;
4. The young worker rate (age 16 – 17) will increase from £4.55 to £4.62; and
5. The apprentice rate (which applies to apprentices under 19 and those aged over 19 who are in the first year of their apprenticeship) will increase from £4.15 to £4.30.
Statutory sick pay minimum weekly payment will increase from £95.85 to £96.35 from 4 April 2021.
The prescribed weekly rates of statutory maternity pay, statutory paternity pay, statutory adoption pay, maternity allowance, shared parental pay and parental bereavement leave will increase from £151.20 to £151.97.
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