STATUTORY RATES - 26.03.2020

Increase in a week’s pay

New legislation will increase the rate of a “week’s pay” and some other compensation limits from 6 April 2020. What are the relevant increases?

Annual uprating of limits

The Employment Rights (Increase of Limits) Order 2020 (SI 2020/205) (see Follow up ) will come into force on 6 April 2020. From that date, the maximum amount of a “week’s pay” , which is used to calculate both statutory redundancy payments and the unfair dismissal basic and additional awards, will increase from £525 to £538. In addition, the maximum unfair dismissal compensatory award will increase from £86,444 to £88,519 (or one year’s gross pay if that’s lower). Finally, the limit on the daily amount of statutory guarantee pay, which is paid to employees in the event of lay-offs or short time working, will rise from £29 to £30.

Pro advice. The increases apply where the event giving rise to the entitlement to payment occurs on or after 6 April 2020.

A week’s pay is to rise to £538 and the maximum unfair dismissal compensatory award will increase to the lower of £88,519 or a year’s gross pay.

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