February 28, 2025

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    Key Changes to Employment Law in 2025: What Employers Need to Know

    As we approach April, employers need to be aware of and prepare for a series of significant changes to UK employment law. These changes cover everything from minimum wage increases to new protections for employees and enhanced employer responsibilities.

    At Law 365, our expert employment law team is here to guide businesses through these updates, ensuring compliance and helping to mitigate potential risks. Below, we outline the key changes, when they will take effect, and what steps employers should take to stay ahead.

    January 2025: "Fire and Rehire" Code of Practice

    As of the 20th January 2025, employers can face increased financial penalties for unreasonably failing to comply with the new "fire and rehire" Code of Practice. Protective awards may be increased by up to 25%, potentially leading to awards of up to 112.5 days uncapped pay per affected employee. The new code encourages dialogue with employees before imposing changes to terms and conditions through dismissal and re-engagement.

    What should employers do?

    • Engage in early and meaningful consultation with employees or representatives when considering contractual changes.

    • Assess whether collective redundancy obligations apply based on the number of employees affected.

    April 2025: National Minimum Wage Increase

    From 1 April 2025, the National Minimum Wage will increase across all age groups, with those aged 21 and over seeing a rise to £12.21 per hour. Employers need to ensure payroll systems are updated and budgets adjusted accordingly.

    April 2025: Changes to NICs and Statutory Pay

    On 6 April 2025, Employer National Insurance Contributions (NICs) will increase from 13.8% to 15%, and the earnings threshold for NICs will drop to £5000 per year from £9100 per year. Additionally, statutory sick pay (SSP) and the rate of family-related statutory pay will also increase.

    What should employers do?

    • Review payroll budgets to account for increased NICs and statutory pay rates.

    • Update payroll systems to reflect the new earnings thresholds and statutory rates.

    April 2025: Introduction of Paid Neonatal Care Leave

    Eligible parents will gain the right to up to 12 weeks of statutory neonatal care leave. This new "day one" right is designed to support parents of babies requiring specialist care shortly after birth.

    What should employers do?

    • Update family-friendly policies to incorporate neonatal care leave- or seek support to do so.

    • Ensure payroll systems can accommodate statutory neonatal care pay where applicable.

    How Law 365 Can Help

    Navigating these changes can be complex, but Law 365's expert employment law team is here to help. We offer tailored advice, policy reviews, and compliance support to keep your business on track. Whether you need help drafting new policies, conducting risk assessments, or training your HR team, our specialists are ready to support you.

    For more information or to discuss how we can assist your business, contact us today. 

    Do you have a legal question for us?

    Whether you are just getting started, need a template package or just some legal advice for your business, we are here to help with any questions you may have.

    Our mission is to help you succeed, with less risk.

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