It was announced the Autumn 2017 budget that:
– The National Living Wage (for those aged 25 and over) is to increase by 4.4% from £7.50 per hour to £7.83 per hour from 1 April 2018.
The other National Minimum Wage rates will also increase as set out below:
21 to 24 year olds: from £7.05 to £7.38 per hour (up 4.7%)
18 to 20 year olds: from £5.60 to £5.90 per hour (up 5.4%)
16 to 17 year olds: from £4.05 to £4.20 per hour (up 3.7%)
Apprentices: from £3.50 to £3.70 per hour (up 5.7%)
– From April 2018, all payments in lieu of notice will be subject to income tax and national insurance contributions, whether or not there is a payment in lieu of notice (or ‘PILON’) clause in the contract of employment. However, the introduction of employer’s national insurance contributions on termination payments over £30,000 will be delayed by a year, and will therefore not take effect until April 2019.
– The Government will publish a discussion paper as part of its response to the Taylor review of modern employment practices (find our article on the Taylor review here), looking at potential changes to the employment status tests for both employment rights and tax purposes.
Changes to the following statutory rates have also been announced:
– The weekly rates for statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will increase to £145.18 (up from £140.98) from 9 April 2018.
– The rate for statutory sick pay will increase to £92.05 per week (up from £89.35) from 9 April 2018.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.