April shower of changes for employers

After two full years of surviving all that the pandemic has thrown at them, employers might be forgiven for thinking they deserved a little respite from the continually shifting sands of employment regulation.

But April, when the new tax year begins, is inevitably the time when changes to employment law are most often introduced, and 2022 is no exception.

Minimum wage increases
The range of minimum wage rates that must be paid to staff has increased every April since 2016, before which the recommendations of the Low Pay Commission were always considered and, more often than not, adopted in October. But this year, sees some bumper increases that are among the highest ever, in a bid to keep pace with rising inflation.

The headline ‘National Living Wage’ that now applies to employees aged 23 and over will rise 6.6% to £9.50 per hour, the largest single increase in the top rate since the new terminology was introduced. Those aged 21 or 22 will do even better, getting a 9.8% pay-rise to £9.18 per hour.

But apprentices will be the biggest winners, as the Apprentice rate is being brought into line with the rate for under-18s. This will give apprentices a raise of almost 12%, to an hourly rate of £4.81. Over 18s who are not yet 21 will receive a more modest increase to £6.83 per hour.

At the same time, the statutory payments for Maternity Pay will also increase, from £151.97 to £156.66 per week (or 90% of the employee’s average weekly earnings, if that is lower). The new rate will apply to Paternity, Shared Parental, Adoption and Parental Bereavement pay, as well as to the Maternity Allowance. Meanwhile, Statutory Sick Pay is also being increased, from £96.35 to £99.35 per week.

National Insurance hike
These increments in April are nothing new, but this year the government is also planning to introduce its temporary hike in National Insurance, to help fund the NHS and social care services as they try to recover from the pandemic. The extra 1.25% will apply to both employer and employee contributions, despite strong criticism that those on lower wages will be the hardest hit.

This increase in National Insurance is only supposed to be in place for one year, after which the government plans to replace it with a new ‘Health and Social Care Levy’.

Physical right to work checks
The lifting of pandemic restrictions is a huge relief. But the relaxation will also see the return of some administrative chores. The ‘right to work’ checks that employers must carry out to ensure individuals are legally permitted to work in the UK have been relaxed to allow for electronic document checking, during the pandemic. From April 6, however, physical checks of the documents must be made again.

Bank holiday bonus
While we could all probably do with an extra day off in 2022 after the past couple of years, the additional Bank Holiday to celebrate the Queen’s Diamond Jubilee could provide more headaches for employers.

As well as managing staff requests for holiday to take advantage of the four-day weekend (the Spring Bank Holiday is moving from the end of May to Thursday, June 2nd), which employees are entitled to the extra day of paid leave will generally depend on how holiday entitlement is defined in their contract. So, employers may also need to check the Ts and Cs to determine whether staff benefit or not.

Whatever the legal question, all of our business policyholders have access to ARAG’s legal advice helpline, where they can get guidance on any legal or tax issue facing their business.

Disclaimer - all information in this article was correct at time of publishing.