Key employment law changes: April 2023

Employment law remains a fast-changing area. As an employer you need to stay up to date with developments to ensure that you are acting lawfully.  We look at what is happening in April 2023 and what you need to do.

National minimum wage and national living wage

The next round of changes to the national minimum wage and national living wage will take effect on 1 April 2023:

• the national living wage will increase to £10.42;
• 21 – 22 Year Old Rate will increase to £10.18;
• 18 – 20 Year Old Rate will increase to £7.49;
• 16 – 17 Year Old Rate will increase to £5.28;
• the minimum hourly rate for apprentices will be £5.28; and
• the accommodation offset limit will be £9,10.

Employers should check that workers and employees are being paid the correct amounts. It is prudent to check those workers and employees who have recently had a birthday that will take them from one hourly rate to another. There is a requirement for your employers to keep accurate pay records and make them available when requested. There are penalties should HMRC finds that an employer has failed to pay the minimum wage. This includes a fine of up to 20,000 and legal action including criminal legal proceedings. A worker or employee who has failed to receive the minimum wage could make a complain to the employment tribunal to recover the shortfall.

Due to high inflation the national minimum wage and national living wage have increased substantially compared to previous years. Employers will need to be alive to this substantial increase. With inflation due to fall by the ned of the year, next year’s increases may well be more in line with previous increases.

Statutory payments

Statutory sick pay increase to £109.40 per week from 6 April 2023. 

Statutory maternity pay, maternity allowance, statutory paternity pay, statutory adoption pay, shared parental leave and statutory parental bereavement leave pay will be £172.48 (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate) per week from 2 April 2023.

Unfair dismissal

From 6 April 2023, the maximum basic award in an unfair dismissal case will be £19,290 and the maximum compensatory award will be £105,707 or 52 weeks’ pay. The maximum compensatory award is lower of statutory limit or 52 weeks’ actual gross pay at the time of dismissal. The limit does not apply where reason for dismissal or redundancy selection is carrying out health and safety activities or making a protected disclosure.

Employer should also note that the limit on a week’s pay does not apply to a claim to failure to inform or consult regarding collective redundancy nor in respect of a failure to inform or consult on a TUPE transfer.

A failure to inform or consult regarding collective redundancy can result in an award of up to 90 days’ pay. A failure to inform or consult on a TUPE transfer still gives rise to maximum award of 13 weeks’ pay.

Redundancy

The cap on a week’s pay, which is used to calculate statutory redundancy payments, will increase from £571 to £643. An employer will need to take care to ensure that they use the new rates when calculating redundancy payments, basic awards and other sums based on a weeks’ pay.

For more information

For more information regarding the latest employment law changes, please get in touch with our Employment team.