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Minimum wage and Employment Tribunal award increases, and changes to auto-enrolment pensions

28th February 2018

The new rates for the minimum wage from the 1st April 2018 have been set out in Regulations before Parliament.

The rates that will apply from the 1st April 2018 are as follows:-

 - 25 yrs old and over - £7.83 (previously £7.50)

21 yrs old to 24 yrs old - £7.38 (previously £7.05)

18 yrs old to 20 yrs old - £5.90 (previously £5.60)

Under 18 yrs old £4.20 (previously £4.05)

The maximum accommodation set off allowed from the 1st April 2018 will be £7.00 per day (previously limited to £6.40).

Slightly irritatingly the day on which the rates of the Employment Tribunal awards change is  5 days after the change in the rates of the minimum wage. 

The limit of the compensatory award (for unfair dismissal) will be £83,682 (currently £80,541).

The maximum figure for a “week’s pay” used for the calculation of statutory redundancy payments will be £508 (previously £489).

The daily rate of Guarantee pay will be £28 (previously £27).

Certain awards made in the Employment Tribunals are subject to set minimum amounts for the basic award. This applies in cases where the dismissal was unfair by virtue of health and safety grounds, employee representative, trade union, or occupational pension trustee reasons. In such cases the minimum basic award will rise to £6,203 (previously £5,970). 

In addition, from April 2018 the minimum contribution into a pension scheme will increase to 5% of the employee’s qualifying earnings, of which the employer must pay at least 2 %.

Looking ahead the Government has also proposed that auto-enrolment provisions should be extended to 18 year olds by the mid 2020s. They have also proposed that contributions will be calculated on the individual’s total earnings, rather than just those earnings above the National Insurance lower earnings limit.

If you need any further advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.

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