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Increases to statutory rates (including National Minimum Wage) from April 2017
It has been confirmed that the statutory rates for maternity pay, paternity pay, shared parental pay, adoption pay and sick pay will all increase from April 2017.
The rates are being increased in line with the consumer price index (CPI). A 0.1% fall in the CPI in the year to September 2015 meant that there was no increase to the rates in April 2016.
The current weekly rates for statutory maternity and adoption pay (after the first six weeks of leave), paternity and shared parental is £139.58 (or 90% of the employee's average weekly earnings if this figure is less than the statutory rate). These will rise to £140.98 per week.
The increases usually occur on the first Sunday in April (which will be 2 April 2017). However, the Department for Work and Pensions has suggested that these statutory rate increases will probably take effect on 10 April 2017.
The rate of statutory sick pay will be increasing from £88.45 to £89.35. This increase is expected to occur on 6 April 2017.
To be entitled to these statutory payments, the employee's average earnings must be equal to or more than the lower earnings limit, which will also increase to £113 in April 2017.
The Government has also decided to permanently move the annual National Minimum Wage changes from 1st October to the 1st April; this has been done so they align with the National Living Wage changes.
Therefore the new National Living Wage and National Minimum Wage rates from 1 April 2017 will be:
- £7.50 per hour - 25 yrs old and over
- £7.05 per hour - 21-24 yrs old
- £5.60 per hour - 18-20 yrs old
- £4.05 per hour - 16-17 yrs old
- £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.
Hopefully by making you aware of these changes well in advance of April 2017, this will help you to plan your budgets for 2017/18.
Fiona Haworth. You can contact Fiona on firstname.lastname@example.org
If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Fiona on the above.