I am sure most of us spent the afternoon of 23rd November sitting on the edge of our seats with bated breath. Patiently awaiting the arrival of Conservative Chancellor Jeremey Hunt and his announcement of the Autumn Statement.
The time has come, the news is out and the 110 measures for growth have been broadcast. Which of these measures impacts employment law and in particular, SME’s, I hear you ask. Having had time to reflect on the statement, we can confirm the following expected key changes that may influence employment:
1. Cuts to National Insurance
Jeremy Hunt has confirmed that the employee national insurance rate will be cut from 12% to 10%, from 6th
January 2024. It is said that this change will help 27 million people. The example he used was someone on an average salary of £35,000 who will save over £450 a year as a result of the cut. Shadow Chancellor Reeves disputes Mr Hunt’s statement and contends that this will not offset the earlier increases made by the Conservative Government.
2. National Living Wage increase in 2024
Before the announcement was made, whispers of an increase to the National Living Wage could be heard. Mr Hunt has now confirmed that from April 2023, the National Living Wage will increase from £10.42 to £11.44.
This is an increase of 9.8% and will result in an annual pay rise next year for a full-time worker on the living wage. 18–20-year-olds will also receive an increase to their hourly rate from £7.49 to £8.60.
The policy will also be extended to cover workers aged 21 and over, rather than 23 and over which it currently covers.
3. Occupational Health
Following the conclusion of the DWP’s consultation into occupational health in July, the government have announced that it intends to provide clearer guidance and support by establishing an ‘expert’ group that will develop a new voluntary occupational health framework.
4. Fit Note Reform
The Government has announced it will be launching a consultation into fit note reform. The aim – to improve fit note assessments and quicken the provision of specialised employment and health support. They will also be conducting trials into referral processes and digital access. This consultation is scheduled to open in 2024.
It can be said that these changes/proposals do not have any real impact on employment law currently. However, Employers and Employees alike should bear these changes in mind. Particularly to ensure that they are both paying and receiving the correct hourly rates to the correct age categories.
Employers should also keep their eyes peeled for the occupational health and fit note reforms. It is crucial that Employers are managing sickness absence appropriately.
Should you require any assistance in managing sickness absence or any other employment related matters, get in touch with one of the team:
Robert Holland, Partner: rholland@acandco.com
Nicola Gray, Partner ngray@acandco.com
Karen Harvie, Senior Associate: kharvie@acandco.com
Catriona Ramsay, Senior Associate: catriona.ramsay@acandco.com
Amanda Paterson, Solicitor: apaterson@acandco.com
Katy Sharpe, Solicitor: ksharpe@acandco.com
