The new employment compensation limits from April 2022

04/04/2022

April is a busy month for business owners as it marks the end of the financial year. It is also the time of year in which employers must familiarise themselves with the new compensation limits and changes to the National Minimum Wage.

National Minimum Wage

The 1 April saw increases to the National Minimum Wage which has increased to reflect the rising living costs.

Minimum Wage

Statutory Payments

Statutory payments determine the minimum and maximum amounts employers can pay their staff for time off work. Typically, maximum payments increase on the 6 April each year to reflect the increasing cost of living.

Compensation Limits

Employers should familiarise themselves with the updated rates and limits which took effect from the 6 April 2022. A basic weeks’ pay is used, for example, to calculate a statutory redundancy payment amongst other things.

There have been no changes to the limits of a claim for breach of contract in the Employment Tribunal which currently stands at £25,000. There has been no changes with regards to 90 days pay (limit on week pay does not apply) for failure to inform or consult in a collective redundancy process (limit on week pay does not apply) nor in respect of a failure to inform or consult arising from a TUPE transfer which is still 13 weeks pay.

Payments on insolvency

In respect of payments on insolvency, the maximum payments are as follows:

Arrears of pay £4,568.00

Statutory notice pay (12 weeks’ pay)  £6,852.00

Holiday pay (6 weeks’ pay) £3,426.00

Statutory redundancy payment or basic award (30 weeks’ pay) £17,130.00

More information

For more information please contact our employment team here.

The above is meant to be only advice and is correct as of the time of posting. This article was written by Alex Pearce, Senior Associate in the Employment Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of April 2022

04/04/2022

Authors

Alex Pearce

Senior Associate

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