April 2025 Employment Law Updates: Key Changes You Need to Know

Employment Law Updates April 2025

Although there are nowhere near as many legislation updates this April as there was in April 2024, there are still some updates that businesses need to be aware of.

Here's a rundown of the April changes and a look forward to other upcoming changes.

National Minimum and Living Wage Changes

One big change coming up is the increase in the national minimum wage, to help workers keep up with the rising cost of living. From April 2025, the new rate will set a higher pay standard, aiming to support economic stability. Employers should start getting ready by checking their payroll and making sure they’re set for the change.

From 1 April 2025, the following rates will apply:

• National Living Wage (21 and over): £12.21 per hour

• 18-20 Year Old Rate: £10.00 per hour

• Under 18 Rate: £7.55 per hour

• Apprentice Rate: £7.55 per hour

This means a pay rise for many workers—so now’s the time to check your payroll and budget accordingly! It's important to consider employees who are on lower tiered salaries, not just hourly paid workers. Where you employ younger workers, you will also need to check your employees' ages to make sure they have not entered a new bracket.

Example:

Employee A is 25 and earns £24,000 per year working 40 hours per week. This works out as £11.54 per hour. The current NMW is £11.44 so they are currently earning above the NMW, but from April 2025 they will be under the NMW for their age bracket.

Consequences:

Employers failing to pay the correct NMW rates can find themselves taken to tribunal by their employees and also face penalties from the HMRC of up to 200% if unpaid wages (to a maximum of £20,000 per employee). HMRC also routinely publish the names of companies who are repeat offenders.

Statutory Rate Increases

In addition to the national minimum wage, there will be statutory rate increases that affect various aspects of employee benefits. These adjustments cover statutory sick pay and maternity leave, among others. The new regulations will raise the compensation limits, ensuring that employees receive adequate support during periods of illness or family leave. Employers should update their policies and educate their HR teams to accurately reflect these changes in their operations.

From 6 April 2025, the following statutory rates will apply:

• Statutory Sick Pay (SSP):  £118.75 per week (dependent on their daily rate and the number of qualifying days they work each week - see the Government calculator here https://www.gov.uk/calculate-statutory-sick-pay).  The average weekly earnings required to qualify for SSP will increase to £125 per week.

• Statutory Maternity, Paternity, Adoption, Shared Parental Pay, Paternal Bereavement Pay and Neonatal Care Pay: £187.18 per week (or 90% of their average weekly salary, whichever is lower). The average weekly earnings required to qualify for these payments will increase to £125 per week.

• Statutory Redundancy Pay: The statutory cap increases to £719.

Tax and NI Threshold Changes

Changes to National Insurance and taxation thresholds will raise employment costs for employers. However, small businesses may benefit from the increased Employment Allowance and the removal of the eligibility threshold to help offset expenses.

From 6 April 2025, the following thresholds will apply:

• Employer's National Insurance Contributions (NICs):  Increases to 15%.

• Employer's NI Secondary Threshold: Decreases to £5,000.

• Employment Allowance: Increases to £10,000.

Neonatal Care Leave Provisions

April also brings the introduction of neonatal care leave. This new provision allows parents to take paid leave if their newborn requires medical treatment in a neonatal unit. This leave is essential for supporting new parents during a challenging time, ensuring they can be present for their child’s care without the stress of financial burdens. Employers should consider implementing clear policies regarding neonatal leave to ensure compliance and understand the rights of their employees. This legislation will apply to all babies born on or after 6th April 2025, requiring uninterrupted neonatal care of 8 days or more, up to a maximum of 12 weeks.

Bank Holidays for 2024/2025

If you run holiday years April - March, you may need to take action to ensure that your employees receive their full holiday entitlement for the year April 2024 - March 2025.

Due to Easter falling in mid-April 2025, there will only be seven bank holidays between 1st April 2024 and 31st March 2025. Employers with a holiday year matching this period may need to give an extra day of leave to full-time workers entitled only to the statutory minimum of 28 days, as they would otherwise receive only 27, breaching the Working Time Regulations 1998.

Whether you need to provide an additional day will depend on the wording in your contracts.  If your holiday clause states employees are entitled to 28 days each year including bank holidays then you do not need to take any action, as the additional day will be included in their holiday entitlement.

If your clause states they are entitled to 20 days plus bank holidays then you will need to credit them an additional day, to make up for the 'missing' bank holiday.

Looking Ahead

The government published a number of amendments to the Employment Rights Bill, but there is still a way to go before the legislation is finalised so more changes are to be expected.

Likely potential changes include:

• Statutory Sick Pay available from the first day of sickness (no waiting period) and those earning below the lower earnings limit being given the right to sick pay at 80% of their average weekly earnings.

•  Tighter Fire and Rehire restrictions.

• Miscarriage Bereavement Leave