2023 Annual Increases to Employment Pay Rates, Limits and Compensation Awards

Spring has arrived, and with it so have the annual government revisions. As part of this, the government have announced increases to employment pay rates and a rise in compensation limits. These changes were announced by Chancellor Jeremy Hunt in his Autumn statement, and are due to come into action from April 2023.

Trainee solicitor Luke Bitti explains the details of these changes below.

Employment Rate Changes 2023

What is the National Living Wage? (age 23 or over)

From 1^st April 2023 the National Living Wage (NLW) for those aged 23 and over will be increasing to £10.42 per hour from £9.50. The 9.7% increase will be the largest since the introduction of the National Living Wage back in 2016.

Bryan Sanderson, Low Pay Commission (LPC) Chair has stated that the increase, “will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. For a full-time worker, this increase means nearly £150 more per month.”

What is the National Minimum Wage (below 23 or an apprentice)

For those between the ages of 21-22, the minimum hourly rate will be increasing to £10.18. For those who are aged 18-20, the new figure will stand at £7.49.

Workers under 18 will be entitled to an hourly rate of at least £5.28, which is the same as the rate for apprentices who are under 19 or in the first year of their current apprenticeship. Again, these new rates apply from 1^st April 2023.

What is the Accommodation Offset Rate?

Accommodation provided by an employer can be taken into account when calculating the NLW or the National Minimum Wage.

From 1^st April 2023 the daily accommodation offset amount will be increased to £9.10 from the previous figure of £8.70.

Sick Pay and Family-Related Pay

After the above changes, a few days later on 10^th April 2023, statutory sick pay and family-related benefit payments are also set to increase.

Statutory Sick Pay (SSP) is increasing to £109.40 per week from its previous figure of £99.35.

Statutory Maternity, Paternity, Shared Parental, Adoption and Parental Bereavement pay will also increase to £172.48 per week (up from £156.66). However, the weekly earnings to remain eligible to claim will remain the same, at £123 per week.

Please see full details of the increases in the table below:

Employment Tribunal Awards

The government has also announced the annual increases to Employment Tribunal compensation awards and statutory redundancy payments.

For cases involving a dismissal that takes place on or after 6^th April 2023, the limit on a ‘week’s pay’ will stand at £643, which is an increase from the previous cap of £571. This ‘week’s pay’ will be for calculating the basic award in an unfair dismissal case and for statutory redundancy payments.

The maximum compensatory award for unfair dismissal cases will increase from £93,878 to £105,707. Again, the new limit will only apply in relation to dismissals on or after 6^th April 2023.

For “injury to feelings” awards in discrimination and certain other cases, the President of the Employment Tribunals in England and Wales has amended the Presidential Guidance to update the so-called Vento bands of compensation. The bands will be as follows for claims presented on or after 6^th April 2023:

• The lower band for less serious cases will be £1,100 to £11,200.
• The middle band for cases not meriting an award in the upper band will be £11,200 to £33,700.
• The upper band for the most serious cases will be £33,700 to £56,200.
• The most exceptional cases will be capable of exceeding £56,200.

Please see the table below for full details:

Get Legal Advice from Howells Solicitors

To discuss any of the above in more detail or any other employment law related issues, please get in touch and we will be happy to help.

Please email employment.department@howellslegal.com or phone 02920 437484.