Rate Rises in April 2021 – Numbers to Know
Key Contact: Claire Knowles
Author: Adam McGlynn
This 6 April will see a number of increases to rights and remuneration rates affecting current employees and new hires:
National Minimum Wage
The National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase after the government accepted the Low Pay Commission’s in full. In addition, the NLW age threshold will be lowered from 25 years to 23 years following research which found 23-24 years olds have faced similar, or even greater, challenges than 25 year olds during the course of the Coronavirus pandemic. The new age thresholds and rates to apply from 6 April 2021 will be as follows:
|Age||Rate from 1 April 2020||Rate from 1 April 2021|
|Age 23+ (NLW)||£8.72||£8.91|
|Age 21 – 22||£8.20||£8.36|
|Age 18 – 20||£6.45||£6.56|
|Age 16 – 17||£4.55||£4.62|
Weekly Pay Cap for Statutory Redundancy Pay
An employee’s statutory redundancy payment is calculated as a multiple of a week’s pay, which is subject to a statutory cap. The statutory cap on a week’s pay from 6 April 2020 was £538 and, following the budget announcements, the new cap from 6 April 2021 will be £544.
Statutory Maternity Pay
Statutory family-related pay including maternity, paternity, adoption, parental bereavement, and shared parental pay are calculated, at various stages, by reference to the ‘Prescribed Rate’. This rate is set by the government each year and takes effect from the first Sunday in April which, this year, will be 4 April 2021. After the first six weeks of maternity or adoption leave at 90% weekly earnings, the employee’s entitlement becomes capped at the Prescribed Rate for the remaining 33 weeks of statutory pay entitlement. The Prescribed Rate cap also applies to paternity pay, parental bereavement pay, and any shared parental pay. The rate for 2020/21 was £151.20, which increases to £151.97 for 2021/22.
Statutory Sick Pay
Entitlement to statutory sick pay (SSP) is triggered from the fourth day of incapacity onwards and lasts up to 28 weeks. The last twelve months have seen a special exception introduced for those suffering from COVID-19, for whom SSP entitlement takes effect from the first day of sickness. The SSP rate for 2020/21 was £95.85 which is increased to £96.35 from 6 April 2021.
For further guidance on the above topic, please get in touch with our Employment team.
Claire Knowles – Partner
Adam McGlynn –Solicitor
Daniel Evans – Solicitor