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Employment Law Changes 2025

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Employment Law Changes 2025

To ensure you are up to date with the employment law changes for 2025 please purchase our employee handbook which is currently legally compliant, but as we look ahead to 2025, several crucial changes in employment law are on the horizon. Please be aware of these updates, as they will impact your existing employee handbook on specific dates throughout the year. Rest assured, our employee handbook template will be promptly updated to incorporate these changes at the appropriate times.

If you acquire an employee handbook from our site before these revisions, it will be your responsibility to integrate these changes. Alternatively, feel free to reach out to us, and we will provide you with an updated policy or handbook at no cost, according to your preference, specifically addressing the 2025changes, assuming you have purchased our employee handbook.

Employee Rights and Entitlements 2025: Key Updates

As we prepare for the employment law changes coming into effect in 2025, it is essential to first review and integrate the critical updates introduced in 2024, ensuring they are firmly embedded in practice for the year ahead. Below is a summary of the key updates to employment rights and entitlements for 2025:

Key Employment Rights and Entitlements for 2025

1. National Minimum and Living Wage Increases (Effective 1 April 2025)

The new wage rates, revealed alongside the Autumn Budget in October 2024, will be:

  • National Living Wage (21+): Increases by £0.77 (6.7%) to £12.21/hour.
  • Ages 18-20: Rises by £1.40 (16.3%) to £10.00/hour.
  • Ages 16-17: Sees an increase of £1.15 (18.0%) to £7.55/hour.
  • Apprentices: Matches the 16-17 rate, also increasing to £7.55/hour.
  • Accommodation Offset Daily Rate: Up by £0.67 (6.7%) to £10.66/day.

2. Family-Friendly Payment Rates (Effective 6 April 2025)

Revised rates for Statutory Maternity Pay, Paternity Pay, Shared Parental Pay, Adoption Pay, Maternity Allowance, and Parental Bereavement Pay will be confirmed in December 2024. These changes will take effect from 6 April 2025.

3. Statutory Sick Pay Update (Effective 6 April 2025)

The updated Statutory Sick Pay (SSP) rate will be introduced on 6 April 2025, coinciding with the family-friendly payment updates.

4. Redundancy and Basic Award Statutory Cap (Effective 6 April 2025)

Changes to the statutory cap used for calculating redundancy payments and basic awards are anticipated in March 2025, coming into force in April.

5. Vento Bands Revision (Effective 6 April 2025)

Employment Tribunals across England, Wales, and Scotland will update the Vento bands, used to calculate compensation in discrimination claims, with adjustments effective from April 2025.

6. New Parental Rights: Neonatal Care Leave and Pay

Starting April 2025, the Neonatal Care (Leave and Pay) Act 2023 introduces up to 12 weeks of Neonatal Care Leave (NCL) for eligible parents whose baby requires hospital care within the first 28 days of birth. This leave is in addition to other parental leave entitlements.

7. Gender Pay Gap Reporting Deadlines

Employers with 250 or more employees must meet the following deadlines:

  • Public Sector: Submit by 30 March 2025 (snapshot date: 31 March 2024).
  • Private Sector and Voluntary Organisations: Submit by 4 April 2025 (snapshot date: 5 April 2024).

Recap of Key Employment Updates from 2024

Annual Leave Rules (Effective 1 January 2024)

  • Workers may carry over up to 28 days of leave under specific conditions, such as maternity or sickness absence.
  • COVID-19 carryover provisions ended, requiring employees to use accrued leave by 31 March 2024.

Rolled-Up Holiday Pay (Effective 1 April 2024)

  • Employers may incorporate holiday pay (12.07% of normal pay) into regular payments for part-year and irregular-hours workers.
  • New calculations require inclusion of regular overtime and performance-related pay.

Flexible Working Rights (Effective 6 April 2024)

  • Flexible working became a day-one entitlement, removing the 26-week employment requirement.
  • Employers must consult employees before rejecting applications and respond within two months.

Carer’s Leave Entitlement (Effective 6 April 2024)

  • Employees gained the right to one week of unpaid leave annually for caregiving, which can be taken in half-day increments.

Enhanced Redundancy Protection (Effective 6 April 2024)

  • Pregnant employees and those returning from family-related leave were given priority for redeployment during redundancy.

Fair Allocation of Tips (Effective May 2024)

  • Employers must ensure fair distribution of tips and gratuities, maintain a written policy, and keep records for three years.

Sexual Harassment Prevention (Effective October 2024)

  • Employers are now required to implement proactive measures to prevent workplace harassment, supported by relevant training and policies.

These changes serve as a foundation for compliance in 2025 and beyond.

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