When TS Eliot wrote "April is the cruellest month", we can be sure that he wasn't referring to HR professionals having to get to grips with a raft of changes to employment law. However, every year sees a flurry of announcements in the run-up to 1 April listing increases to employment-related payments, with some legislative developments thrown in as well.
This year is no different. This article summarises the changes and the steps you need to take to be prepared for them.
National minimum wage
Out of all the changes, employers will be most concerned about the imminent increase in payroll costs caused by the national minimum wage rises. 1 April marks the annual increases in the national living wage and the various rates of the national minimum wage, as well as the accommodation offset. For those aged 23 or over, the national living wage increases to £10.42 per hour and the adult rate of the national minimum wage (payable to 21 and 22 year olds) rises to £10.18 per hour.
The increases this year are substantial, amounting to almost 10% across the board, and have been caused by the rise in the rate of inflation. Employers will need to consider how they are going to afford the higher rates of pay, bearing in mind recent calls from the Bank of England not to pass on higher costs to consumers since this will only stoke inflation further. Employers will be hoping that inflation will fall by the end of this year in order to avoid putting further pressure on wages next year.
Statutory family payments will rise on 2 April this year, from which date the weekly payment will be £172.48. This is relevant to:
- Statutory maternity pay
- Statutory paternity pay
- Statutory adoption pay
- Statutory shared parental pay
- Statutory parental bereavement pay.
Statutory sick pay will also increase but this takes effect from 6 April. The new rate will be £109.40 per week.
Employment tribunal awards
The limits on awards that can be made by the employment tribunal increase on 6 April every year. From that date, the limit on a week's pay – for calculating the basic award in an unfair dismissal case and the statutory redundancy payment – will go up to £643. This means that the maximum basic award (or statutory redundancy payment) will be £19,290.
The maximum compensatory award for unfair dismissal is going up to the lower of £105,707 and 52 weeks' actual gross pay. Although this sounds like a substantial amount, the most recent employment tribunal statistics show that in 2021-22 the average (mean) unfair dismissal award was £13,541. Note that the new figures apply where the effective date of termination is on or after 6 April 2023.
Other awards that are linked to a week's pay (such as compensation for a failure to provide a statement of written particulars and a breach of the right to be accompanied) will also increase.
Compensation for injury to feelings awards in discrimination claims will go up on 6 April for claims issued on or after that date. The lower band (less serious cases) will be from £1,100 to £11,200; the middle band (cases that do no merit an award in the upper band) will be £11,200 to £33,700; and the upper band (the most serious cases) will be £33,700 to £56,200. The most exceptional cases can exceed the top of the upper band.
Other developments in April
A number of changes to the Immigration Rules come into force in April. Those employing overseas workers will need to be aware of these developments:
- On 12 April, minimum salary thresholds and the going rates for individual occupations increase to reflect current wage inflation, as well as a shorter working week. These are relevant to the Skilled Worker, Global Business Mobility, Scale-up and Seasonal Worker routes
- Changes to the endorsement criteria and evidential requirements come into force and will affect the Global Talent route from 12 April
- With effect from 13 April, the Innovator and Start-up routes close to new applicants and are replaced by a new Innovator Founder route.
What about the rest of 2023?
At the last count there were nine employment-related Bills working their way through Parliament, all of which were either Government Bills or private members' Bills backed by the Government, meaning that they are likely to become law. It is possible that a number of them will be passed this year and will require action by employers to comply with them. The pace of change for those involved in HR is unlikely to slow any time soon.
Our employment law timeline is regularly updated and includes links to relevant resources.