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01 Mar 2022

What are the new employment compensation limits from 6 April 2022?

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Every tax year there is an increase to the core compensation limits for certain employment rights. This year the following increases will apply from 6 April 2022 inclusive:

  • A week’s basic pay, which is the figure used in redundancy calculations and basic awards will increase from £544 to £571; and
  • The maximum compensatory award for an unfair dismissal claim increases from £89,493 to £93,878.

Given these fairly significant increases (which in percentage terms are much larger than last year’s increases reflecting the current inflationary environment), employers with dismissals on the horizon may want to ensure that where possible these dismissals are completed before 6 April 2022, after which it may become more expensive.

We’ve also include a summary of the other upcoming rate changes.

National Minimum Wage

From 1 April 2022 inclusive the following hourly national minimum wage rates will apply:

  • National living wage for those over 23: from £8.91 to £9.50.
  • National minimum wage for those aged 21 to 22: from £8.36 to £9.18.
  • National minimum wage for those aged 18 to 20: from £6.56 to £6.83.
  • National minimum wage for those aged under 18: from £4.62 to £4.81.
  • Apprentice Rate: from £4.30 to £4.81.

Family friendly rights

From 3 April 2022 (inclusive) the weekly rate of statutory maternity pay, maternity allowance, statutory paternity pay, statutory shared parental pay, statutory adoption pay will be will be £156.66 (up from £151.97) or 90% of the employee’s average weekly earnings, whichever is lower.

Sick pay

From 6 April 2022 inclusive the weekly rate of statutory sick pay will be £99.35 (up from £96.35).

If you have any queries please contact Paul Reeves, Leanne Raven or your usual Stephenson Harwood contact.

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KEY CONTACT

Paul Reeves

Paul Reeves
Head of employment

T:  +44 20 7809 2916 M:  +44 7919 694 135 Email Paul | Vcard Office:  London

Leanne Raven

Leanne Raven
Senior knowledge development lawyer

T:  +44 20 7809 2560 M:  +44 7827 353 108 Email Leanne | Vcard Office:  London