Employment law changes coming up in April 2025

2025 will see many new employment law changes come into effect, with a focus on better pay and higher National Insurance.

Employment law solicitor, Samatha Castle, recaps the key changes taking place this year and how they will affect employees and employers.

National Living and National Minimum Wage increases

On 1^st April, the National Living Wage and the National Minimum Wage will increase:

• Ages 21 and over: £11.44 to £12.21 (+ 0.77p providing an extra £1,400 a year for eligible full-time workers).
• Ages 18 to 20: £8.60 to £10.00 (+ £1.40 boosting eligible full-time workers’ pay by £2,500 a year).
• Under 18s and apprentices: £6.40 to £7.55 (+ £1.15).
• If apprentices are aged 19 or over and have completed the first year of their apprenticeship, they are entitled to minimum wage for their age.

With attentive planning, employers can prepare for the new change by updating the payroll systems and making employees aware of the increase if necessary.

Statutory pay increases

From 6^th April, statutory pay rates will increase:

To be eligible for these payments, the weekly earnings threshold will also increase from £123 to £125.

National Insurance increase for employers

The amount of National Insurance employers pay will rise from 13.8% to 15% from 6^th April.

The threshold in which businesses start paying National Insurance on worker earnings will decrease from £9,100 to £5,000.

Although this change will affect employers in terms of what they pay their staff, further down the line, employees could face restrictions in wage rises and fewer benefits including the salary sacrifice scheme.

Increased Employment Allowance for small businesses

The Employment Allowance currently allows eligible employers to reduce their annual National Insurance liability by up to £5,000. From April 2025, this will increase to £10,500, meaning an estimated 865,000 small employers and charities will not have to pay any National Insurance.

New legislation for Neonatal Care (Leave and Pay) Act 2023

The Neonatal Care (Leave and Pay) Act 2023 will allow employed parents to be absent from work for a prescribed period in respect of a child who is receiving or has received, neonatal care. From 6^th April, around 60,000 new parents will benefit from a new right to neonatal care leave and pay; a day-one right which ensures employed parents can focus on supporting their new family without the worry and guilt of choosing to spend time with their baby and keeping their job.

Employees will receive up to 12 weeks of paid leave (and, if eligible, pay) on top of any other leave they may be entitled to, including maternity and paternity leave for babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of seven full days or longer. Parents who are self-employed or who have a worker employment status will not qualify.

One to watch: the Employment Rights Bill

The Employment Rights Bill has been further amended and is in the reporting stage. There are several proposed changes that may affect the workplace in 2025, including:

• Zero-hour workers will be offered guaranteed minimum hours but can stick with their contract’s original terms if preferred.
• Agency workers will be included in the zero-hours ban.
• Parents who experience a pregnancy loss before 24 weeks’ gestation will be offered two weeks’ bereavement leave.

Read our update in full here.

Further information

Employers should start preparing now to ensure they are ready for the changes. If you’re unsure how any of these changes will affect you as an employee or an employer, speak to a member of our Employment Law team on 0117 325 2929 or fill out our online enquiry form.