Key Employment Law Updates: what Employers Need To Know

A new year indicates even more work law updates are just around the corner. Employment law is a continuously progressing area that companies require to stay notified. This is crucial to ensure compliance and support their workforce successfully. As we enter a new year, several key updates are emerging that might affect organizations of all sizes.

In this blog, we will check out substantial employment law changes coming in 2025. These include National Living Wage increases, changes to statutory payments, and changes to employer National Insurance contributions. Developments in pension plans and the Neonatal Care (Leave and Pay) Act 2023 will also be talked about. We will examine the implications of the Draft Equality (Race and Disability) Bill for companies. Understanding these changes is important for company owner and managers to guarantee compliance and navigate the months ahead with confidence.

National Minimum Wage

From 1st April 2025, the National Base Pay for 18-20 years of age will increase from ₤ 8.60 to ₤ 10. The boost in the rate for 18 to 20-year-olds lowers the space with the National Living Wage. Therefore, lining up with strategies to extend the adult rate to include 18-year-olds in the future.

The National Living Wage (NLW) for workers aged 21 and over is set to increase by 6.7 percent. From April 2025, this will raise the per hour rate for NLW employees from ₤ 11.44 to ₤ 12.21. For full-time staff members, these employment law updates represent an annual pay boost of around ₤ 1,400.

Baroness Philippa Stroud, Chair of the LPC, said:

The Government have been clear about their ambitions for the National Base Pay and its importance in supporting living requirements. At the very same time, companies have needed to handle the adult rate rising over 20 per cent in 2 years. In addition, the challenges that has developed together with other pressures to their expense base.

Updated Statutory Payments

A range of statutory payments will also increase including statutory ill pay, and statutory parental pay.

Statutory Sick Pay

Other employment law updates consist of the SSP increase. Statutory Sick Pay is set to increase from ₤ 116.75 to ₤ 118.75 each week in the 2025/2026 fiscal year. Additionally, the Lower Earnings Limit, which is the minimum weekly profits needed for employees to get approved for payments like Statutory Sick Pay, will increase from ₤ 123.00 to ₤ 125.00.

Statutory Parental Pay

Statutory payments, including maternity pay, adoption pay, paternity pay, shared parental pay, and adult bereavement pay, will increase from ₤ 184.03 to ₤ 187.18 weekly. Additionally, the Lower Earnings Limit-the weekly revenues threshold for eligibility for all these payments, except maternity allowance-will increase from ₤ 123 to ₤ 125.

Employer National Insurance Increase

We make certain all companies understand the employer national insurance boost becoming law from 6 April 2025. As part of the employment law updates, the company NI rate will increase from 13.8% to 15%, adding extra expenses for companies on revenues above the threshold. Furthermore, the annual profits threshold for employer NI contributions will be lowered from ₤ 9,100 to ₤ 5,000, meaning companies will require to start paying NI contributions on a greater portion of their staff members’ revenues.

To support smaller sized services in handling these increased expenses, the employment allowance-a relief that minimizes the quantity of NI contributions smaller companies need to pay-will boost considerably, rising from ₤ 5,000 to ₤ 10,500. This procedure intends to balance out the financial concern on smaller organisations and help them stay sustainable while ensuring compliance with the updated requirements.

These work law updates highlight the significance of examining payroll processes and budgeting for the additional expenses to prevent unexpected financial difficulties. Employers are encouraged to consult or examine their monetary planning to ensure they can effectively adjust to these changes.

Draft Equality (Race and Disability) Bill

The Government prepares to speak with on The Equality (Race and Disability) Bill, focusing on pay gap reporting improvements.The Bill will require organisations with over 250 employees to report ethnic background and impairment pay spaces transparently.

This constructs on gender pay space reporting, aiming to highlight wage variations and promote fairness in organisations. By increasing transparency, the updates intend to address systemic inequalities and motivate reasonable pay practices. Employers must ensure robust information collection and reporting procedures to fulfill these new obligations successfully. These changes seek to foster a more inclusive and fair office for all workers.

Another focus will be on equal pay and outsourcing. New measures will be presented to reinforce equal pay rights for employees dealing with discrimination based on race or special needs. These arrangements aim to guarantee that all staff members receive reasonable and equivalent reimbursement for work of equivalent value, despite their background or employment situations. To enhance these defenses, employers will be clearly forbidden from utilizing outsourcing or subcontracting plans to bypass their equivalent pay responsibilities.

The Bill will require to go through parliamentary argument before it can enter into the list of employment law updates for this year. However, it’s expected to be presented during this parliamentary session, likely by spring 2025.

Secretary of State for Education and Minister for Women and Equalities, Bridget Phillipson MP, said:

We understand a lot of individuals throughout our country face unjustified barriers, employment which’s why we will guarantee equality and opportunity are at the very heart of all our objectives.

I am proud to stand together with our strong Women and Equalities Ministerial team, working tirelessly to address the source of inequalities and socio-economic downside.

Neonatal Care (Leave and Pay) Act 2023

The Neonatal Care Act is thought to come in to require as early as April this year and will give staff members up to 12 weeks of paid leave if their baby is confessed to healthcare facility. This uses to children admitted within their first 28 days of life who have a constant hospital stay of seven days or more. The leave, which has a minimum entitlement of one week, will be in addition to existing maternity, paternity, and shared adult leave rights.

This new privilege intends to offer vital assistance for parents throughout challenging situations, guaranteeing they can prioritise their baby’s care without financial or professional penalties.

Statutory code of practice for right to turn off

The legal right to turn off is among lots of future work law updates that is currently being extensively gone over. This proposition will progress this year through a statutory code of practice. However, employment the Government will have to seek advice from on this before making its way through parliament. Key points for this act consist of:

– The proposed “right to turn off” law aims to protect employees’ work-life balance.
– Employers will be forbidden from getting in touch with staff members beyond designated working hours, employment except in extraordinary circumstances.
– The legislation addresses concerns about office tension and burnout brought on by blurred boundaries between work and personal life.
– It seeks to promote employee wellness, enhance productivity, and foster a much healthier office culture.
– Exceptional situations, employment such as emergency situations or important company needs, will be plainly specified and interacted by companies.
– If carried out, the law would represent a considerable step forward in establishing clear limits in contemporary work environments.

Plan Ahead for Employment Law updates

As we go into 2025, staying upgraded on employment law changes is vital for employers across all sectors. From greater pay thresholds to brand-new privileges and reporting requirements, these changes will considerably. Proactively adapting to these advancements ensures compliance and fosters a workplace culture that supports employees and employment success.

With quick changes in labor force dynamics and guidelines, routine evaluations of policies and procedures are important for companies. Seeking expert suggestions and utilizing updated resources can make browsing these changes simpler and more efficient. By embracing these updates, businesses can get rid of difficulties and enhance their commitment to fairness and worker wellness. Let 2025 be a year of compliance, growth, and development for your organisation.