The Government has announced that there will be no annual increase in various types of statutory pay in 2016.
Statutory maternity and paternity pay, shared parental pay and adoption pay will see no rise from the current rate of £139.58 or 90% of an employee’s average weekly earnings if this amount is less than the statutory rate. The rate of statutory sick pay has also been frozen at the current weekly rate of £88.45.
There is no statutory requirement to increase statutory pay rates annually, but they do normally go up every April so that they rise alongside the consumer price index (CPI). However, the fact that the CPI actually dropped in the year leading up to September 2015 by 0.1 per cent prompted the freeze for the 2017-2017 period.
Employers are usually able to claim back 92 per cent of employees’ statutory maternity pay, paternity pay, adoption pay and shared parental pay.
To be entitled to statutory payments, an employee’s average earnings must be equal to or more than the lower earnings limit, which has also been frozen at £112.
Useful Statutory Pay Guides for Employers
You may find the following Government guides to statutory pay useful:
If you are in need of any advice, you should talk to your bookkeepers. They will be able to talk you through how statutory pay works, and will help you forecast ahead if you have staff taking leave in the near future.