New statutory rates that will apply from April 2020 - what you need to know
National Minimum Wage (NMW) Rises:
NMW rates will increase on 1st April 2020 as follows:
- The national living wage hourly rate for workers aged 25 and over, will increase from £8.21 to £8.72.
The rates for younger workers will also increase, with hourly rates rising to:
- £8.20 for workers aged at least 21 but under 25;
- £6.45 for workers aged at least 18 but under 21; and,
- 4.55 for workers aged under 18 who are no longer of compulsory school age.
The rate for apprentices will rise to £4.15.
Statutory Sick Pay (SSP) Increases:
SSP entitlements arises when an employee is sick for four or more consecutive days, and lasts for up to 28 weeks, in relation to any one period of incapacity for work.
From 6 April 2020, the new rate is expected to be £95.85 (up from £94.25 currently).
Statutory Maternity Pay (SMP) Increases:
For the first 6-weeks of an employees’ maternity leave, SMP is paid at 90% of the employee’s average weekly earnings.
For the remaining 33-weeks SMP is paid at either:
- the flat SMP rate (which changes annually on the first Sunday in April); or,
- 90% of the employee’s average weekly earnings if this is lower.
From 5 April 2020 the proposed new rate is £151.20 (up from £148.68 currently).
Statutory Redundancy Pay Increase Cap:
For the purposes of calculating statutory redundancy pay, the maximum amount of a weeks’ pay is adjusted each year in-line with changes to the retail prices index (RPI).
Thus, if we compare the RPI for September 2019 vs the RPI for September 2018, the new maximum amount of a weeks’ pay, from 6 April 2020 will be £538 (the current maximum is £525).