After a well- deserved break over the holidays, the Black Mountain team are ready to help our clients to start budget planning for the next financial year, and to advise of some of the forthcoming 2022 changes that have been published. We will provide further guidance as new updates are confirmed.
The National Minimum Wage (NMW) and National Living Wage (NLW) from 1 April 2022 are:
SSP (Statutory Sick Pay) 6 April 2022
The weekly rate of SSP increases from £96.35 to £99.35. This applies where Average Weekly Earnings (AWE) are at or above the Lower Earnings Limit (LEL) for National Insurance (£123 per week for 2022/23). These are payable from the first day of the new tax year, i.e., 06 April 2022:
The weekly rate increases from £151.97 to £156.66. This applies where Average Weekly Earnings (AWE) are at or above the Lower Earnings Limit (LEL) for National Insurance (£123 per week for 2022/23). These are payable from the first Sunday in April, i.e., 03 April 2022:
Rates effective from the week starting on or after Sunday SMP / SAP weekly rate for first 6 weeks
Lesser of 90% AWE or the following Statutory rates:
• SMP weekly rate for up to next 33 weeks (maternity) • SAP weekly rate for up to next 33 weeks (adoption) • SPP weekly rate (paternity)
• ShPP weekly rate (shared parental)
• SPBP weekly rate (parental bereavement)
Optional daily rate
Percentage of payment recoverable
Percentage of payment recoverable (Small Employer’s Relief) NI compensation recoverable under Small Employer’s Relief Annual NICs threshold for Small Employer’s Relief
Statutory Weekly Redundancy Cap Limit
03 April 2022 90% AWE £156.66
£22.38 92% 100% 3% £45,000
The increase due in April of the weekly statutory redundancy pay has not yet been published.
National Insurance Increases from 2022 and beyond
National Insurance (NI) will increase from April 2022 to pay for health and social care costs. The 1.25% increase will apply to employees, employers, and self-employed people across the UK. From April 2023 it will be collected as a separate Health and Social Care levy (HSC levy), which will also be paid by state pensioners.
The plan is expected to raise £36billion over the next three years, with the majority going to the NHS to help reduce the treatment backlog. An estimated £5.3billion a year will go to social care.
As an employer, you pay a percentage of Class 1 National Insurance for each employee whose salary is above the threshold of £8,840, so the increase will add directly to your costs. These additional costs include the NI on benefits and termination payments.
Currently, employees with earnings above the threshold, as employers you will pay 13.8% and employees with earnings above the threshold of £9,568 will pay 12% of their earnings up to £50,270 a year and 2% above this amount.
Overall, the government estimates that UK employers will pay an additional £6.5billion and employees £4.3billion.
The table below details the current class 1 rates and how these will change from 2022 based on the new health and social care levy:
An anticipated part of the 2022 employment law changes is the Employment Bill, although there is no guarantee that one will appear. If it does, then likely is to include the following measures:-
• The establishment of a new single enforcement body for employment rights.
• The extension of protection against redundancy re pregnancy, maternity, adoption, and shared parental leave, including extending redundancy protection to 6 months post return to work after the end of maternity leave, with similar protection afforded to those returning to work from adoption leave and shared parental leave.
• Neonatal leave and pay.
• A new right to 1 week’s unpaid leave per year for carers.
• On the 24 September 2021, the Government announced that it is to legislate in order to make it compulsory for businesses in the hospitality, services, and leisure sectors to pass on all tips to staff. The new legislation is likely to be included in the Employment Bill. The legislation will include the following: (i) a legal requirement to pass on all tips to staff; (ii) a new statutory code of practice setting out rules and regulations on how tips are distributed amongst staff; and (iii) a right for employees to request information from their employer regarding their tipping records, and a legal right for employees to bring a claim before an employment tribunal should they believe that they are owed money relating to tips.
• A new right for workers to request a more stable contract after 26 weeks service.
• New legislation to enhance flexible working rights. The Government is currently consulting on this issue, and whether to make flexible working a day 1 right.
• An extension of time required to break a period of continuous service from 1 week to 4 weeks.
• New legislation making it compulsory for organisations to publish their modern slavery statements on a new government-run registry.
Should you wish to discuss this in more detail, please contact us via telephone or email