April 2024 brings increases to employment rates and limits, which are updated yearly in response to changes in inflation rates. These increases will impact statutory redundancy payments, national minimum wage rates, and employment tribunal awards.
Among the various increases, the most important ones for employers to note are outlined below.
National minimum wage
From 1 April 2024, the national minimum wage rates (including the national living wage rate) will increase as follows:
- for workers aged 23 and over, from £10.18 (which is the current rate that applies to workers aged 21 to 22) and £10.42 to £11.44 per hour. From 1 April 2024, workers aged 21 and over will also be entitled to the national living wage rate;
- for workers aged 18 to 20, from £7.49 to £8.60 per hour; and
- for workers aged under 18, from £5.28 to £6.40 per hour.
For apprentices, the minimum hourly rate will increase from £5.28 to £6.40. This applies to apprentices who are below the age of 19, or apprentices who are 19 and over and in the first year of their apprenticeship.
The daily rate for the accommodation offset limit will also increase from £9.10 to £9.99. The accommodation offset limit is the maximum amount an employer can subtract from an employee’s pay for any accommodation provided by the employer.
According to a Government press release announcing the new rates, these changes mark the largest ever cash increase in the national minimum wage to date.
Statutory sick pay
From 6 April 2024, statutory sick pay will increase from £109.40 to £116.75 per week.
Generally, employers cannot recover statutory sick pay from HMRC.
Statutory maternity, paternity, adoption and shared parental pay
From 7 April 2024, statutory maternity, paternity, adoption and shared parental pay will increase from £172.48 to £184.03 per week.
Employers can reclaim all or most of these statutory payments from HMRC.
Limits on employment tribunal awards
The statutory limit on several employment tribunal awards will also increase. For events giving rise to compensation which occurred on or after 6 April 2024:
- the maximum amount of a week’s pay (used for calculating statutory redundancy payments and various awards including the unfair dismissal basic and compensatory awards) will increase from £643 to £700; and
- the maximum compensatory award for an unfair dismissal claim (provided it falls below the additional cap on the compensatory award of 52 weeks' pay) will increase from £105,707 to £115,115.
Vento bands for injury to feelings awards
The Vento bands, which serve as guidelines for employment tribunals in determining awards for injury to feelings in discrimination (and certain other) claims, will be adjusted for claims made on or after 6 April 2024, as set out below:
- Lower band (for less serious cases): £1,200 to £11,700 (previously £1,100 to £11,200).
- Middle band (for cases not warranting an upper band award): £11,700 to £35,200 (previously £11,200 to £33,700).
- Upper band (for the most serious cases): £35,200 to £58,700 (previously £33,700 to £56,200).
In exceptional cases an award may exceed £58,700.
What’s ahead?
We outlined significant forthcoming reforms in 2024 as well as other anticipated changes to happen later this year in our update, The people agenda 2024. These include new statutory rights for employees in respect of flexible working, predictable working, enhanced redundancy protections, sexual harassment in the workplace, and carer’s leave. Many of these changes will require changes to workplace policies and procedures as well as training for people managers, and employers will need to prepare for them.
Should you wish to discuss the potential impacts of any of these changes on your business operations and employees, please get in touch with your usual contact in the CMS Employment team.
This article was co-authored by Nicole Ho, a trainee solicitor in the CMS UK Employment team.
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