A reminder that increases in statutory payments for 2019 are imminent

Notwithstanding the amount of Parliamentary time that Brexit has taken up, it is good that the increase in statutory rates was published in good time at the end of last year to enable employers to plan ahead. These increases are in line with the Consumer Prices Index.

It is important that employers of all sizes are aware of the statutory increases that come into effect on 7 April 2019 (the first Sunday in April) to ensure that their affected employees receive the correct payments.

Here is a snapshot of the main increases that are scheduled to come into effect: –

Statutory Maternity Pay
This is scheduled to increase from £145.18 to £148.68. The first six weeks’ payments are payable at 90% of the employees weekly pay. Do remember that if the employee’s weekly earnings are less than the statutory rate then payments should be at 90% of their average weekly earnings. Statutory Maternity Pay is payable for a maximum of 39 weeks.

Statutory Paternity Pay and Statutory Shared Parental Pay
These payments are also scheduled to increase from £145.18 to £148.68 or 90% 0f the employee’s average weekly earnings if this figure is less than the statutory rate. Payments of Statutory Paternity Pay are for up to two weeks immediately following the birth (even if premature) or at any time within the following eight weeks. If you qualify for Paternity leave you can choose whether to take one week of two weeks’ leave. The two weeks’ paternity leave must be taken in one block and cannot be split. Shared Parental pay is payable for 39 weeks in total and as with statutory maternity pay the first six weeks is payable at 90% of salary.

Statutory Adoption Pay
The rate of Statutory Adoption Pay is also scheduled to increase from £145.18 to £148.68 or 90% of average weekly earnings is less than this sum. The first six weeks pay once again is payable at 90% of the employee’s average weekly pay.

Statutory Sick Pay
The rate of Statutory Sick Pay is scheduled to increase from £92.05 to £94.25 from 6 April 2019 and the maximum entitlement is 28 weeks in any linked period.

National Minimum/Living Wage
It is also important to remember that the National Living Wage payable to those aged 25 and over will increase by 4.9% from 1 April 2019 from £7.83 per hour to £8.21 per hour. This is in line with the Low Pay Commissions recommendations and will benefit around 2.4 million workers across the UK.
The following National Minimum Wage increases will also come into effect on 1 April 2017 for those aged below the age of 25.

Those aged 21 -24 – the hourly rate will increase from £7.38 to £7.70

Those aged 18 – 20 – the hourly rate will increase from £5.90 to £6.15

Those aged 16 – 17 – the hourly rate will increase from £4.20 to £4.35

Apprentices will also benefit and will see an increase in the hourly rate from £3.70 to £3.90.

Statutory Redundancy Pay
The statutory redundancy payment caps will increase from £508 to £525 from 6 April 2019 in accordance with the Employment Rights (Increase of Limits) Order 2019.

For the sake of completeness, the lower earnings limit will increase from £116 to £118 in April 2019.
It is also worth pointing out that some employees might have greater contractual entitlements to these payments and so it is worth reviewing any internal policies to ensure that they are up to date. Usually the first slice of any enhanced contractual payments tend to be the statutory proportion but the detail as ever is in the wording and meaning of any written policies.

Our recommendation for employers of all sizes is to ensure that they are aware of these increases. Otherwise there is a risk that they could inadvertently expose themselves to the risk of employment tribunal claims for unlawful deduction of wages/breach of contract or are fined and/or named and shamed by HMRC as a consequence of failing to pay the correct National Living/Minimum wage rates.

If you have any concerns about these statutory increases or any written policies then contact Steven Eckett, Partner and Head of Employment at Meaby & Co LLP seckett@meaby.co.uk or 020 7703 5034.