The government have followed up it’s announcement regarding minimum wage increases, with proposed increases to the existing statutory rates. Legislation entitles qualifying employees to statutory payments during a period of sick leave, or when taking ‘family friendly leave’ such as maternity, paternity and adoption leave. These rates are subject to review each year and the government intend to implement these increases in April 2020.
The rate for statutory maternity pay is set to increase on 5 April, in line with the first Sunday of the month. Employees will be entitled to a higher rate of £151.20 per week, up from £148.68, whilst the qualifying criteria will remain the same. This means those whose average weekly earnings are less than this statutory rate will be entitled to 90% of their weekly earnings instead. The pay rates for employees during maternity and adoption leave will also experience the same increase, rising to £151.20 per week.
Statutory sick pay is set to increase one day later, on 6 April 2020, in line with the first Monday of the new tax year. From this date onwards, employees who are off sick from work for four days or more will be entitled to £95.85 per week. Individuals will only qualify for these payments if their weekly earnings are equal to, or above, the lower earnings limit. Although this currently stands at £118 per week, it is expected that a new lower earnings limit will be announced.
Ahead of April, organisations will need to review their existing policies on statutory leave and ensure these are up to date. Those who offer the statutory minimum pay for these periods of leave should be familiar with the process by now and it is important that payroll departments are aware of the need to abide by these increased rates. After all, failing to pay staff correctly runs the risk of costly tribunal proceedings.
It is also important to recognise how these new rates will impact those who are part way through a period of statutory leave when the rates are introduced. In these situations, it is essential that all existing payments are reviewed and increased accordingly, thereby ensuring staff are remunerated correctly.