April is a busy month for businesses and employment lawyers alike. A number of employment law changes have come into effect in April that HR Directors and employers need be aware of. Employment Solicitor Alexander Pearce provides a summary of these updates:
Employment Tribunal Compensation Limit Change
The limit on the amount of compensation awarded by the Employment Tribunal for unfair dismissal will increase from £83,682 to £86,444. The upper limit which can be paid out will be either £86,444 or 52 weeks of actual pay, if that is less than the statutory cap.
The maximum statutory redundancy payment (and basic award for unfair dismissal) will increase to £15,750 (up from £15,240).
Changes to Statutory Redundancy
Any employees who are made redundant with two years' service or more can be awarded an amount based on the employee's weekly pay, length of service and age.
The maximum amount the weekly pay is subject to will be £525. This came into effect on 6th April 2019 (up from £508).
Increase to the National Living Wage
On 1st April 2019, the National Living Wage (formerly known as the National Minimum Wage) increased by 4.9% for all age groups calculated at:
- £8.21 per hour for workers age 25 and over (up from £7.83)
- £7.70 per hour for workers age 21-24 (up from £7.38)
- £6.15 per hour for workers age 18-20 (up from £5.90)
- £4.35 per hour for workers under age 18 (up from £4.20)
- £3.90 per hour for apprentices (up from £3.70)
Failure to pay the National Living Wage can result in being publically named and liable for a maximum penalty of £20,000.
Common reasons for failing to pay the National Living Wage include:
- Not classifying workers correctly, i.e. registering them as self-employed instead of employed
- Not accounting the entire time that the employee spent working
As a business owner or HR professional it is important that HR policies and procedures are up to date and that the amount the worker is entitled to is recorded correctly.
Workers Entitled to Itemised Pay Statements
From 6th April 2019, those classified as workers (this includes agency workers who must get payslips from their agency) are legally entitled to receive an itemised pay statement. These were previously only required for employees.
Anyone who is genuinely self-employed is not entitled to get a payslip.
A payslip must include:
- the gross amount of wages or salary to be paid
- the net amount of wages or salary to be paid
- the amounts of any variable deductions
- the amounts of any fixed deductions
- a breakdown of how the wages will be paid if more than one payment method is used (e.g. cash and cheque)
If a workers' remuneration varies depending on the number of hours worked, their pay slip must clearly set out those extra hours. An example of this is where a worker or employee is paid a fixed salary but can work overtime on an ad-hoc basis at an hourly rate. In such cases, the overtime work needs to be shown on the pay statement.
If a payslip is delayed or isn't provided, a worker can ultimately bring a claim at an Employment Tribunal.
Certain Statutory Pay Amount Increase
Statutory maternity pay, paternity, adoption and shared parental pay increased to £148.68 per week from 7th April 2019.
From 6th April 2019, statutory sick pay increased to £94.25 per week.
Make sure your HR Policies are up to date
Alexander Pearce is currently offering a Free Employment Legal Review for new clients. He will look at your employment documentation and procedures and advise on any updates, additional clauses or policies that may be needed. This is a no-obligation offer with limited availability in April and so is offered on a strictly first come first served basis.