As we welcome in 2025, there are several significant employment law changes set to impact workers that employers need to be aware of. The most notable changes include increases in the National Minimum Wage and National Living Wage, the introduction of the Neonatal Care (Leave and Pay) Bill and the changes previously announced by the Labour Government in the Employment Rights Bill.
However, the Employment Rights Bill is said to require extensive consultation prior to its implementation. Therefore, it is not expected to bring further changes until 2026 at the earliest.
Increase in National Minimum Wage and National Living Wage
The UK is set to see a substantial increase in both the National Minimum Wage and the National Living Wage. These changes are set to be implemented from 01 April 2025 and will have a significant impact on low paid workers, and young workers in particular. The changes are designed to help workers with the ongoing cost of living crisis and ensure they are receiving fair renumeration for their efforts.
- National Living Wage: This applies to workers aged 21 and over and is set to rise by 6.7%, from £11.44 to £12.21 per hour
- National Minimum Wage: This applies to workers under the age of 21. The following increases are set to be implemented:
- For workers aged 18-20, the rate will increase from £8.60 to £10.00 per hour, a 16.3% rise
- For workers aged 16-17, the rate will go up from £6.40 to £7.55 per hour, marking an 18.0% increase
- The apprentice rate will also increase from £6.40 to £7.55 per hour, aligning with the rate for 16-17-year-olds
Employers will need to adjust their payroll systems and budgets to accommodate the increased rates to ensure compliance with the new legislation.
The Neonatal Care (Leave and Pay) Bill
The Neonatal Care (Leave and Pay) Bill is expected to come into force in April 2025. The legislation aims to support parents of newborns who require neonatal care, providing them with financial support and entitlement to time-off work during a critical period.
Some key elements of the legislation include:
- Up to 12 weeks of Statutory Neonatal Pay and Leave for parents or others with a personal relationship to a child who required neonatal care within 28 days following birth
- Statutory Neonatal Pay and Leave is available to employees with 26 weeks’ continuous service
- Leave must be taken within 68 weeks of the child’s birth
- Neonatal leave will be taken at the end of other leave entitlement – i.e. maternity/paternity leave
- It is likely that the Act will include a provision for alternative employment to be offered in the event of redundancy during any period of neonatal leave
The introduction of this bill acknowledges the need for additional support for parents of children requiring neonatal care and aims to reduce the stress and financial strain on families during such a difficult period.
Employers will need to update their leave policies to incorporate the provisions of the Neonatal Care (Leave and Pay) Bill, and ensure that eligible employees are aware of their rights and entitlements.
Employment Rights Bill Future Changes
The Employment Rights Bill is set to introduce several reforms, although these are not set to be implemented until 2026 at the earliest, due to the need for extensive consultation. Key proposals include:
- Ending exploitative zero-hours contracts
- Day-one rights for employees, in relation to unfair dismissal, paternity, parental and bereavement leave
- Removal of the lower earnings limit for Statutory Sick Pay and eliminating the waiting period before sick pay begins
- Flexible working to be made the default, where practical
- Requiring employers to create action plans to address gender pay gaps
- Menopause support for employees
Overall, the employment law changes planned for 2025 represent a significant shift towards the support of workers in the UK. Employers must stay informed and proactive in implementing these changes, to ensure compliance, and support their workforce effectively.
If you have any questions in relation to the upcoming changes in employment law, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members
