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The National Living Wage

As of 1st April 2016, all workers aged 25 and over who were previously covered by the National Minimum Wage will now be entitled to receive the National Living Wage which has been introduced at the rate of £7.20 per hour.  The National Minimum Wage will continue to apply to workers under the age of 25.

Failing to comply with the National Living Wage will bring a hefty penalty of 200% of the amount owed to the worker(s) unless the arrears can be cleared within 14 days.  The maximum penalty which may be imposed will be limited to £20,000 per worker, but may still result in sizeable back payments in the event of a breach.

Compensation Limits and Statutory Rates of Pay

Later this month, from 6th April 2016, the following changes to compensation shall come into effect: 

  • The statutory limit on the amount of a week’s pay for the purposes of calculating compensation (ie statutory redundancy payments and the basic award for unfair dismissal) will increase from £475 to £479;
  • The maximum compensatory award for unfair dismissal increasing from £78,335 to £78,962, or one year’s salary if this is less than the statutory maximum; and
  • The penalty for failing to provide a written statement of terms (a contract of employment), which is capped at two or four weeks’ pay, shall increase from £950 (or £1,900) to £958 (or £1,916).

The Government has confirmed that the rate of statutory sick pay shall remain the same at £88.45 per week, and the rate of statutory maternity pay, paternity pay, adoption pay and shared parental leave pay shall remain the same at the rate of £139.58 per week.

For more information please contact Martin Sinclair or Nicola Gray or call 01224 632464.

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