April 2023 employment and immigration law changes

The national minimum wage rates will increase from 1 April 2023 as follows:

• National living wage (workers aged 23 and over): increase from £9.50 to £10.42
• Standard adult rate (workers aged 21-22): increase from £9.18 to £10.18
• Development rate (workers aged 18-20): increase from £6.83 to £7.49
• Young workers rate (workers aged 16 and 17 who are not apprentices): increase from £4.81 to £5.28
  
• Apprentice rate (apprentices under 19 or aged 19 or over and in the first year of apprenticeship): increase from £4.81 to £5.28

The maximum unfair dismissal compensatory award will increase from £93,878 to £105,707. Consequently, for any dismissals which take effect on or after 6 April 2023, the cap on the compensatory award will be the lower of £105,707 or 52 weeks' pay.

The limit on a week's pay used to calculate certain statutory payments and provisions will rise from £571 to £643 from 6 April 2023. As a result, the maximum basic award and statutory redundancy payment will be £19,290.

From 6 April 2023, the threshold above which taxpayers pay the top rate of tax is going to be reduced for all UK taxpayers from £150,000 to £125,140.

The top two rates of Scottish income tax will increase by 1% from April 2023, the higher rate going up from 41% to 42% and the top rate going up from 46% to 47%.

The pensions lifetime allowance (the maximum amount pension savings can grow to and stay tax free) will be removed from 6 April 2023.

From 6 April 2023 the annual allowance for tax relief on pension savings in a registered pension scheme will increase from £40,000 to £60,000.

Private and voluntary sector employers with 250 or more employees must publish a gender pay gap report by 4 April 2023 (using 5 April 2022 as a snapshot date). For relevant public sector employers, a report must be published by 30 March 2023 (using 31 March 2022 as a snapshot date). Furlough will no longer have an impact on calculations.

Workbox by Brodies subscribers can find a detailed step-by-step guide to gender pay gap reporting here.

A temporary concession to allow the employment of overseas nationals joining vessels involved in the construction and maintenance of offshore wind farm projects in UK territorial waters without the need to obtain a work visa is due to end on 30 April 2023.

A new Innovator Founder route will be introduced from 13 April 2023 replacing the existing start-up and innovator visa routes. The start-up route will close to new applicants from 13 April 2023 except for individuals who have already been issued with an endorsement.

There will be various changes under this new route, including the removal of the £50,000 minimum funds requirement for overseas nationals seeking to come to the UK to establish an innovative business, which may provide added flexibility in some cases. Individuals will now also be able to seek employment outside of running their business, provided their secondary employment is a skilled role (at least RQF Level 3).

The following minimum annual salary thresholds will increase from 12 April 2023:

• Skilled Worker visas (general salary): increase from £25,600 to £26,200 (£10.75 hourly rate)
• Global Business Mobility visa (senior or specialist worker): increase from £42,400 to £45,800
• Global Business Mobility visa (graduate trainee): increase from £23,100 to £24,220

There will be other immigration changes in April including new going rates for the listed job codes. The most up to date guidance should always be considered when issuing a certificate of sponsorship on or after 12 April 2023. Further information on these changes will follow in our next immigration update blog, which will be published shortly.