KEY EMPLOYMENT LAW CHANGES APRIL 2018

April 2018 heralds the start of the new financial year. A number of important employment law changes also come into effect and it is important for all businesses to be aware of the changes and when they come into effect.

1 April 2018

 

  • National living wage.The National Minimum Wage (Amendment) Regulations 2018 will come into force on 1 April 2018. The national living wage for workers aged 25 and over will increase by 33p to £7.83 an hour. The rates of other minimum wage bands will also increase.
  • Statutory payments. The Social Security Benefits (Up-rating) Order 2018 (SI 2018/281)raises the level of statutory maternity, adoption, paternity and shared parental pay to £145.18 on 1 April 2018 (with maternity allowance rising to the same rate on 9 April 2018). Statutory sick pay rises to £92.05 on 6 April 2018.

 

4 April 2018

6 April 2018

 

  • Tribunal compensation limits. The Employment Rights (Increase of Limits) Order 2018 (SI 2018/194)will come into force on 6 April 2018. The maximum compensatory award for unfair dismissal will rise from £80,541 to £83,682. The maximum amount of a week’s pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, also rises from £489 to £508.
  • Termination payments.On 6 April 2018, all payments in lieu of notice, including payments where there is no contractual PILON power, will be subject to income tax and class 1 NICs. HMRC states that the new rules apply only where both payment and termination occurs on or after 6 April 2018 (section 5 of the Finance (No.2) Act 2017and the Social Security (Contributions) (Amendment No. 2) Regulations 2018 (SI 2018/257)). With effect from the same date, section 5 of the Finance (No.2) Act 2017 will also place payments for injury to feelings outside the exemption for injury payments (except where the injury amounts to a psychiatric injury or other recognised medical condition), and will grant powers to HM Treasury to vary the £30,000 threshold. Foreign service relief for UK resident employees (except in relation to seafarers) will also be abolished under section 10 of the Finance Act 2018.

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