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Key employment compensation pay rates
The government updates most of the employment pay and compensation rates on an annual basis.
Here's a summary of the current key rates.
New rates have been proposed which will be applicable from 1 April 2018. These are shown in brackets.(New rates correct as at 2 March 2018 in accordance with the National Minimum Wage (Amendment) Regulations 2018, published on 6 February 2018.)
The Minimum Wage
The minimum rate for workers varies according to age.
- standard adult rate for workers aged 21 to 24 it is £7.05 (£7.38) per hour
- development rate for 18 to 20-year-olds it is £5.60 (£5.90) per hour
- young workers rate for 16 to 17-year-olds it is £4.05 (£4.20) per hour
- the apprentice rate is £3.50 (£3.70) per hour
- the accommodation offset £6.40 (£7.00) a day
Last updated 1 April 2017 in accordance with the National Minimum Wage (Amendment) Regulations 2017 SI 2017/465.
The National Living Wage
The National Living Wage for workers aged over 25 is £7.50 (£7.83*) per hour. (See the Gov.uk page)
Statutory Maternity, Paternity and Adoption Pay
The standard rates of statutory maternity, paternity, adoption and shared parental pay are £140.98 per week - or 90 per cent of the person's average weekly earnings if lower.
(Last updated 2 April 2017 in accordance with the Social Security Benefits Up-rating Order 2017 SI 2017/260)
Statutory Sick Pay
The standard rate of statutory sick pay is £88.45 to £89.35 per week.
(Last updated 6 April 2017 in accordance with the Social Security Benefits Up-rating Order 2017 SI 2017/260.)
Employment Claims Compensation Limit
Compensation levels and minimum awards for those pursuing employment related claims (for example, following dismissal) are:
- rates for a week's pay - £489
- the maximum compensatory award - £80,541
(Last updated on 1 April 2017 by virtue of The Employment Rights (Increase of Limits) Order 2017 SI 2017/175)
Note: The Employment Rights (Increase of Limits) Order 2018 SI 2018/194 has now been made. It will make effective the following increases from 6 April 2018:
- Maximum compensatory award for unfair dismissal: £83,682 (from £80,541);
- Rates for a week’s pay (for calculating redundancy payments and unfair dismissal awards: £508 (from £489);
- Minimum basic award for dismissals related to H&S/employee representative/ Trade Union/occupational pension trustee claims: £6,203 (from £5,970).
Be aware of the transition provisions: the new rates will only apply to those claims where the appropriate date arises after 6 April 2018 as set out in section 4 of the Order. For example, if compensation is sought relating to the termination of the employee’s contract, the appropriate date will be the date of the termination.
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers LLP or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.