Starting in April, the employment sector will be subject to a new legislation that will impact workers' pay and leave entitlements. Additionally, working parents will receive certain childcare benefits as part of a significant overhaul revealed by the government last year.
National Insurance Rate Cut
National insurance rates will be reduced from 10% to 8% on April 6. The chancellor stated that the move would translate to approximately £450 per year for a worker making an average salary of £35,000.
Meanwhile, the self-employed National Insurance rate is being reduced from 8% to 6%.
The chancellor stated that when combined with the National Insurance cuts announced last autumn and implemented in January, the policy will result in an average tax cut of £900 per year for 27 million employees and an average £650 cut for two million self-employed people.
Minimum Wage Increase
The government affirmed that the National Minimum Wage and National Living Wage will increase by around 10% in April. Meanwhile, for the first time, workers aged 21 and 22 will be required to pay the higher National Living Wage, raising the lowest full-time adult worker's annual salary to £22,308.
According to the independent Low Pay Commission (LPC), which advises the government on the rate, the adjustments will result in the minimum wage's highest cash increase to date and the first time it has increased by more than £1.
When announcing the wage hike, Chancellor Jeremy Hunt stated: "Next April, all full-time workers on the national living wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise. The national living wage has helped halve the number of people on low pay since 2010, making sure work always pays."
Minimum wage rates starting April 1
- National Living Wage for people aged 21 and up - £11.44.
- National Minimum Wage for persons aged 18 to 20 is £8.60.
- The national minimum wage for people under 18 is £6.40.
- National Minimum Wage for Apprentices - £6.40
According to the Resolution Foundation Think Tank, the hike will directly assist at least 1.7 million workers.
Childcare Changes for Working Parents
Last year, the government planned a significant overhaul of free childcare services in England and Wales. By September of next year, most working households with children below the age of five will be eligible for 30 hours of childcare assistance.
Currently, all three- and four-year-olds have access to 15 hours of free childcare per week. Working families' entitlements increase to 30 hours. There are additional 15 hours available for underprivileged two-year-olds.
Interestingly, new measures will allow working parents of two-year-olds to access 15 hours of free daycare beginning April 1 this year.
Eligible parents who do not register by the March 31 deadline will miss out on childcare this term and must wait until September.
Later this year, 15 hours of free childcare will be extended to working parents with children as young as nine months old, with registration opening in May for the start of the September term.
There are also significant changes planned for Child Benefit eligibility next month. Around 170,000 people will be exempt from paying the high income tax levy beginning April 6, when the threshold for the charge is raised from £50,000 to £60,000.
Additionally, the fee schedule will be cut in half, going from one percent of the child benefit payment for each £100 over the threshold that is earned to one percent for every £200. Accordingly, child benefit won't be fully removed until a parent makes £80,000 or more.
Workers Will Benefit From Flexible Scheduling Right After their Employment
Employees will soon have the ability to ask their employer for more flexible work arrangements starting on April 6th.
At the moment, employees are only entitled to request flexible work arrangements if they have been employed by their company for at least 26 weeks. They can only submit one request per year and must also describe how the change will affect their employer.