APRIL SHAKE UP
APRIL 2025 HR SHAKE UP:
Key Employment Law Changes You Need to Know
April is always a time of rises, as statutory rates go up, but 2025 will see higher rises across more areas. These amendments encompass increases in statutory rates, the introduction of new leave entitlements, and enhanced reporting obligations. It is crucial for employers to understand and prepare for these developments to ensure compliance and support their workforce effectively.
1. Increases in National Minimum Wage and National Living Wage (Effective 1 April 2025)
From 1 April 2025, the National Living Wage (NLW) for employees aged 21 and over will increase by 6.7%, rising from £11.44 to £12.21 per hour. For younger workers, the National Minimum Wage (NMW) rates will also see substantial increases:
Ages 18-20: A 16.3% increase to £10.00 per hour
Ages 16-17 and Apprentices: An 18% increase to £7.55 per hour
Accommodation offset rate: A 6.7% increase to £10.66 per day
“By proactively addressing these upcoming changes, employers can ensure compliance while fostering a supportive and legally compliant workplace.”
2. Changes to Statutory Sick Pay (SSP) (Effective 6 April 2025)
As part of the £240 million "Get Britain Working" plan, the government will extend Statutory Sick Pay to approximately one million low-wage workers.
From 6 April 2025, the weekly rate of Statutory Sick Pay (SSP) will increase from £116.75 to £118.75. Importantly, the earnings qualification criteria for SSP will be removed, meaning all employees will be eligible for SSP regardless of their earnings, provided they meet the necessary conditions.
Those earning below the current SSP threshold will receive 80% of their average weekly earnings or £118.75 per week, whichever is lower.
3. Introduction of Neonatal Care Leave (Effective 6 April 2025)
A new statutory entitlement known as Neonatal Care Leave and Pay will come into effect on 6 April 2025. This will allow parents whose babies require neonatal care to take up to 12 weeks of paid leave, in addition to existing parental leave entitlements. Employees must have at least 26 weeks’ continuous service and meet certain earnings thresholds to qualify.
4. National Insurance increases
Probably the most well known of the upcoming changes is the raising of employers’ national insurance contributions from 13.8% to 15% with effect from 6 April 2025.
Less well publicised is the threshold of worker earnings when businesses start paying any contribution, which is decreasing from £9,100 to £5,000.
Finally, in an effort to support smaller businesses, the Employers Allowance - the amount employers can claim back from their National Insurance bill – is rising from £5,000 to £10,500.
5. Proposed rate changes (Expected April 2025)
Employment tribunal compensation limits are reviewed annually, with updates usually taking effect in April. We are waiting for the proposed changes.
The Government has put forward draft legislation to uplift other rates, and if accepted, these will come into effect on 6 April 2025. Whilst not yet confirmed, the following are the most notable proposals:
Maximum award for lost earnings for unfair dismissal: £115,115 to £118,223
Maximum amount of a weeks’ pay for statutory redundancy: £700 to £719
Action Points for Employers
Review and Update Policies: Ensure that workplace policies reflect the new wage rates, leave entitlements, and reporting obligations.
Communicate with Employees: Inform your workforce about how these changes may affect them, such as increases in minimum wage rates and new leave entitlements.
Training and Development: Provide training to HR and managerial staff to ensure compliance with the new laws.
Data Collection and Reporting: Implement systems to collect and report on ethnicity and disability pay gaps as required.
By proactively addressing these upcoming changes, employers can ensure compliance while fostering a supportive and legally compliant workplace.