The key employment compensation changes coming up in April
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Ewan Keen Joint Head of Department
Partner Employment & Business Immigration +44 20 3206 2724 Email Ewan -
Tamara Ludlow Joint Head of Department
Partner Employment & Business Immigration +44 20 3206 2739 Email Tamara -
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From April 2026, compensation limits and statutory rates will increase, affecting sick pay, minimum wage, family-related entitlements, dismissal and redundancy. Our Employment team have picked out the important changes and implementation dates to look out for:
National Minimum Wage
From 1 April 2026, the National Minimum Wage will increase across all age groups:
- 21 and over: from £12.21 to £12.71
- 18 to 20: from £10 to £10.85
- 16 to 17: from £7.55 to £8
- Apprentices (under 19 years old): £7.55 to £8
Family-friendly statutory payments
On 5 April 2026, the statutory weekly rate for maternity, paternity, adoption, shared parental, neonatal care and parental bereavement pay will increase from £187.18 to £194.32. This means that those who qualify will be entitled to the lesser of £194.32 or 90% of their average weekly earnings for the applicable period of pay.
Other key payment increases
From 6 April 2026, the following will also increase:
- Unfair dismissal – maximum award: The limit on the maximum compensatory award available for unfair dismissal will increase from £118,223 to £123,543. In January 2027, the cap will be abolished completely meaning this will be the final rate increase.
- Award for failure to collectively consult for redundancy: Employers who wish to dismiss 20 or more employees and fail to consult with them within a 90-day period will be liable to pay a maximum of 180 days’ pay. This is double the previous maximum amount of 90 days’ pay.
- One week’s pay: The statutory limit for one week’s pay (used for, amongst other things, calculating statutory redundancy payments and the basic award for unfair dismissal) will increase from £719 to £751.
- Statutory Sick Pay (SSP): Will increase from £118.75 to £123.25 per week. As mentioned in our latest insight piece on the upcoming Employment Rights Act provisions, the three-day waiting period for SSP will also be scrapped on 6 April.
The SMB Employment team is on hand if you require support on compliance or strategy in implementing these payments and any surrounding documents, policies and training. If you’d like to find out more, do get in touch.
To learn more about the key employment law changes coming up soon, you can read our piece on the April Employment Rights Act changes here.
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