Legal News | 2.04.25
Employment Law Update 2025
With the clocks having sprung forward, we have summarised the key changes employers should look for:
Changes to the National Minimum Wage and National Living Wage
From 1 April 2025 the National Living Wage and the National Minimum Wage will increase to the following rates:
| Hourly rate | Age |
|---|---|
| £12.21 | National Living Wage (21 and above) |
| £10.00 | 18 to 20 |
| £7.55 | Under 18 |
| £7.55 | Apprentice |
Changes to Compensation Limits
From 6 April 2025 increased rates will apply:
| Maximum guarantee payments | £39 per day (maximum £190, five days in any three-month period) |
| Maximum week’s pay for calculating redundancy and unfair dismissal basic award | £719 |
| Maximum basic award for unfair dismissal and statutory redundancy payment | £21,570 (30 weeks’ pay subject to the limit on a week’s pay) |
| Minimum basic award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only | £8,763 |
| Maximum compensatory award for unfair dismissal (unlimited for certain automatically unfair dismissals, for example, health and safety or whistleblowing) | £118,223 |
Changes to Statutory Rates
From 6 April 2025 Statutory Rates for those having children are as follows:
| Statutory Maternity Pay – first 6 weeks | 90% of the employee’s average weekly earnings |
| Statutory Maternity Pay – for the remaining weeks | £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower |
| Maternity Allowance – not entitled to Statutory Maternity Pay | |
| Statutory Paternity Pay | £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Adoption Pay – first 6 weeks | 90% of the employee’s average weekly earnings |
| Statutory Adoption Pay – for the remaining weeks | £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay | £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay | £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower |
For the purposes of calculating Statutory Redundancy Pay, a week’s pay will be capped at £719 per week from 6 April 2025. The total amount payable will be based on the number of years of completed service, multiplied by the lower of the actual weeks’ pay, of the cap, and a multiplier of ½, 1 or 1 ½ for each year of service, depending on the age of the employee in that same year.
Statutory Sick Pay will be payable at £118.75 per week from 6 April 2025. Although this is the same for all employees, the amount you must actually pay an employee for each day they are off work due to illness depends on the number of qualifying days they work each week.
National Insurance increases for Employers
From 6 April 2025, National Insurance Contributions (NIC) rates for employers will rise to 15%. The level at which employers start paying NICs will also reduce to £5,000 of an employee’s salary each year.
Neonatal Leave and Pay
The Neonatal Care (Leave and Pay Act) 2023 aims to provide parents of babies with neonatal care needs with greater protections and rights. This act will come into effect on 6 April 2025.
Following implementation:
- Parents of babies with neonatal care needs will be entitled to up to 12 weeks of Neonatal Care Leave as a “day one” right.
- Some parents of babies with neonatal care needs will be entitled to Neonatal Care Pay.
- Parents who take Neonatal Care Leave and Neonatal Care Pay are protected from unfair treatment or dismissal. They cannot be penalised for any reason related to taking the Leave or Pay.
In order to qualify for statutory neonatal care pay, employees must have at least 26 weeks of continuous service and earn the lower earnings limit (£125.00 per week). It is expected that pay will be in line with the statutory prescribed rate for other types of family-related leave (as set out above).
The leave can be taken at any time within the first 68 weeks following the baby’s birth.
Equality Bill
The Government has proposed to introduce a new Equality Bill and key consultations are expected in 2025. This is expected to address pay gap reporting and equal pay rights.
The Bill proposes that companies be required to disclose their ethnicity and disability pay gaps, with the aim of increasing transparency of such pay gaps and then addressing and reducing such pay disparities, promoting equality in the workforce.
Much consultation and Parliamentary debate will be required before any legislation, so this could well be delayed until 2026.
Employment Rights Bill
We have previously discussed the Employment Rights Bill and potential reforms in detail in our earlier articles. The Employment Rights Bill is expected to be passed into law no earlier than summer 2025, with the majority of the reforms likely to take effect in 2026.
The Worker Protection (Amendment of Equality Act 2010) Act
October 2024 saw the Worker Protection (Amendment of Equality Act 2010) Act come into force which introduced a new duty for employers to take steps to prevent sexual harassment in the workplace. UK employers are now obliged to take “reasonable steps” to prevent sexual harassment in the workplace. This represents a shift in employer focus from managing past harassment (reactive) to preventing future harassment (proactive).
Employers are expected to anticipate risk by conducting risk assessments to prevent sexual harassment from taking place. Breach of this duty may result in enforcement action by the Equality and Human Rights Commission.
Training regarding sexual harassment in the workplace must be up to date and refreshed periodically. Whilst this preventative duty only extends in respect of sexual harassment at present, it is anticipated that this will expand to cover additional protected characteristics.
This document represents a summary of some of the key changes and updates to employment law in the winter of 2024 and expectations for 2025, but there were plenty more advancements within the law and there is likely to be significant upcoming changes throughout 2025.
This document should not be relied upon as legal advice. If you would like specific employment advice, or if you have any other queries, please do get in contact with the following team:
Non-contentious employment or HR matters: 01380 733300 | commercial@wansbroughs.com
Contentious employment or HR matters: 01380 733300 | disputeresolution@wansbroughs.com
