Statutory employment payments are a crucial part of the employment landscape in the UK. They are payments that employers are legally obliged to make to their employees under certain circumstances, such as when an employee is made redundant. In recent years, there have been several key increases in statutory employment payments, which have significant implications for both employers and employees. This article will explore these increases and provide a comprehensive guide to statutory redundancy pay.
Understanding Statutory Employment Payments
Statutory employment payments are payments that an employer is legally required to make to their employees under certain circumstances. These payments can include statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay, and statutory redundancy pay. The amount of these payments and the circumstances under which they must be made are set out in law, and employers can face penalties if they fail to make these payments when required.
Key Increases in Statutory Employment Payments
In recent years, there have been several key increases in statutory employment payments. These increases are typically linked to inflation and are designed to ensure that the payments keep pace with the cost of living. Here are some of the most significant increases:
Statutory Sick Pay: The weekly rate for Statutory Sick Pay (SSP) increased from £95.85 to £96.35 in April 2021.
Statutory Maternity Pay: The weekly rate for Statutory Maternity Pay (SMP) increased from £151.20 to £151.97 in April 2021.
Statutory Paternity Pay: The weekly rate for Statutory Paternity Pay (SPP) increased from £151.20 to £151.97 in April 2021.
Statutory Adoption Pay: The weekly rate for Statutory Adoption Pay (SAP) increased from £151.20 to £151.97 in April 2021.
Statutory Redundancy Pay: The maximum weekly pay for calculating statutory redundancy pay increased from £538 to £544 in April 2021.
Understanding Statutory Redundancy Pay
Statutory redundancy pay is a payment that an employer is legally required to make to an employee who is being made redundant. The amount of statutory redundancy pay that an employee is entitled to depends on their age, how long they have been employed by their employer, and their weekly pay.
The calculation for statutory redundancy pay is as follows:
Half a week’s pay for each full year the employee was under 22.
One week’s pay for each full year the employee was 22 or older, but under 41.
One and half week’s pay for each full year the employee was 41 or older.
Note that redundancy pay, including any severance pay, under £30,000 is not taxable.
Recent Changes to Statutory Redundancy Pay
In April 2021, the maximum weekly pay for calculating statutory redundancy pay increased from £538 to £544. This means that the maximum statutory redundancy pay an employee can receive is now £16,320. This increase is significant because it means that employees who are made redundant will receive a higher payment than they would have received under the previous rate.
Conclusion
Statutory employment payments are an essential part of the employment landscape in the UK. They provide important financial support to employees in various circumstances, such as when they are sick, when they become parents, or when they are made redundant. The recent increases in these payments are significant and have important implications for both employers and employees. It is crucial for both parties to be aware of these changes and to understand their rights and obligations under the law.
