Government to freeze statutory pay in 2016

In 2016, the Government has made the decision to freeze statutory pay.

Due to be implemented on the 3rd of April 2016, the rates of statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory adoption pay are frozen as for 2015/16 at £139.58, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate.

For many employees who have been battling ill health or for those who are planning to start a family in 2016, the news that the Government has proposed no increase in various statutory pay rates, including maternity pay, paternity pay, shared parental pay, adoption pay and sick pay may come as an unwelcome surprise.

Legally, the Government isn’t obliged to raise these payments every year, the rates do normally increase in line with the consumer price index (CPI).  However, in 2015 the CPI actually fell by a small amount and therefore there will be no increase in the amounts paid to those taking sick, maternity, adoption or shared parental leave.

Employers can usually reclaim 92% of employees’ statutory maternity pay, paternity pay, adoption pay and shared parental pay and the rate of statutory sick pay is also to be frozen at the current weekly rate of £88.45.

For employers this will mean that their contributions to those of maternity or sick leave will not increase next year and not place further strain on budgets as having staff off work for prolonged periods of time can often be costly due to lack of productivity.

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