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Proposed Statutory Rates Rises for 2018/ 2019 | A Wirehouse Guide

Proposed Statutory Rates Rises for 2018/ 2019 | A Wirehouse Guide

Date: 8th March 2018 | Categories: Employment law

April is fast approaching, and the annual statutory rates rises will soon be upon us including the largest increase in a decade to the statutory minimum wage for workers aged under 25. It’s a key time of year for HR professionals and employers to look at any amendments needed to employment contracts and handbooks including the new family-friendly benefits which are coming into force. We have outlined below the key statutory rates rises that you need to be aware of.

statutory rates

National Minimum Wage

Statutory rates rises effective 1st April 2018

  • Workers aged 25 and over (National Living Wage) – £7.83
  • Workers aged 21 to 24 – £7.38
  • Workers aged 18 to 20 – £5.90
  • Workers under 18 – £4.20
  • Apprentices under 19, (or 19 and over but in the first year of the apprenticeship) – £3.70

Statutory Maternity, Paternity, Adoption and Shared Parental Pay (SMP, SPP, SAP, ShPP)

Rising effective from 1st April to £145.18 (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rates).

Statutory Sick Pay

Rising effective from 6th April 2018 to £92.05 with a lower earnings limit of £116.

(Lay Off) Statutory Guarantee Payment

Rising effective from 6th April 2018 to £28 a day (subject to a maximum of five days or £140 in any three months.

Guidance for Employers

  • The Living Wage and The National Living Wage are two different things. The Living Wage is voluntary and based on the basic cost of living, as opposed to a statutory rate.
  • HMRC (HM Revenue & Customs) can issue a notice for arrears if the Minimum Wage/ National Living Wage is not paid, and a fine. They can also take employers to court for not paying NMW/ NLW. The maximum fine for non-payment is £20,000 per worker. Employers who fail to pay can be banned from being a company director for up to 15 years.
  • Employees can make a complaint to HMRC about their employer if the Minimum Wage is not paid, or pursue a tribunal claim for an unlawful deduction from wages (but can’t do both).
  • If an employee is dismissed or is put at a detriment for becoming eligible for a particular rate of NMW / NLW, then this would be an automatically unfair dismissal.
  • Similarly the dismissal of an employee to avoid the employer’s liability for SMP/ SPP/ SAP/ SHPP or would be automatically unfair.

Stay up to date with all the relevant changes to Employment Law legislation by reading Wirehouse news updates. For advice on all aspects of Employment Law, please contact our dedicated Wirehouse team on 0333 3215005 or email us.

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