Legal update
Changes to statutory caps from 6 April 2025
On 14 March 2025, The Employment Rights (Increase of Limits) Order 2025 was laid before Parliament. The Order increases, from 6 April 2025, the limits applying to certain awards which Employment Tribunals can make, and other sums payable under employment legislation. The increases made by the Order reflect the increase in the retail prices index of 2.7% from September 2023 to September 2024.
We have summarised the key changes below:
Statutory Sick Pay (SSP)
Statutory Sick Pay applies to qualifying employees who have been absent from work for a consecutive period of four days or more (although this is subject to change when the Employment Rights Bill comes into force).
Qualifying employees are entitled to up to 28 weeks’ SSP in any period where they are unable to work.
Statutory Maternity Pay (SMP)
SMP is payable at two different rates:
- Earnings-related rate - for the first six weeks, the employee is paid 90% of their average weekly earnings.
- Prescribed rate - for the remaining 33 weeks, the employee is paid the lower of the prescribed rate or the earnings-related rate (see below).
Statutory Paternity Pay (SPP)
SPP is payable for up to two weeks at either the earnings-related rate (90% of employee’s average weekly earnings) or the prescribed rate (see below), whichever is lower.
Statutory Shared Parental Pay (ShPP)
ShPP is payable at:
- 90% of the average weekly earnings of the person claiming (the earnings-related rate) or
- the prescribed rate (see below),
whichever is lower.
The amount of ShPP that can be shared between eligible parents is 39 weeks less any weeks of Statutory Maternity Pay, Maternity Allowance or Statutory Adoption Pay claimed by the mother or primary adopter.
Redundancy Payments
The maximum amount of a "week's pay" for the purpose of calculating a redundancy payment has increased.
Unfair Dismissal
The limit on the amount of the compensatory award for unfair dismissal has also increased.