What’s Coming in 2025
The year 2025 is poised to bring significant developments to UK employment law, with a mix of legislative changes, consultations, and ongoing trends shaping the workplace. At CoLaw, we have compiled the key updates employers and HR professionals should have on their radar.
Key Legislative Changes
National Minimum Wage and Employment Costs
From 1st April 2025, increases in the National Minimum Wage (NMW) and National Living Wage (NLW) rates will take effect:
| New Rates | 2024/25 Rates | Increase | |
| Apprentice | £7.55 | £6.40 | £1.15 |
| <18 | £7.55 | £6.40 | £1.15 |
| 18-20 | £10.00 | £8.60 | £1.40 |
| 21+ | £12.21 | £11.44 | £0.77 |
In addition, from 6th April 2025, employer National Insurance Contributions (NICs) will rise from 13.8% to 15%, with the earnings threshold lowered from £9,100 to £5,000.
These changes combined are set to increase employment costs significantly, necessitating thorough payroll reviews and compliance checks.
Statutory Rates Increase
From 6th April 2025, the rates for Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) and other family-related statutory pay increases:
- SSP will increase to £118.75 per week.
- SMP and other family-related statutory pay rates will increase to £187.18 per week.
Neonatal Care Leave and Pay
Under the Neonatal Care (Leave and Pay) Act 2023, eligible parents will have a day-one right to 12 weeks of statutory neonatal care leave starting April 2025.
Statutory Neonatal Care Pay (SNCP) will also be available for parents meeting the continuous service requirements.
This new leave ensures additional support for parents of babies requiring neonatal care.
Employment Tribunal Rules and Compensation Updates
From 6th January 2025, new Employment Tribunal rules will be implemented to streamline procedures, impacting how defences to claims are submitted.
April will also bring:
- increases in unfair dismissal compensation caps; and
- updates to the Vento bands for injury to feelings awards.
Fire and Rehire: Higher Protective Awards
Starting 20th January 2025, employers found to have failed collective consultation during a fire and rehire process may face protective awards of up to 112.5 days pay per affected employee, increased from 90 days.
Employers are encouraged to engage in meaningful dialogue with employees before implementing unilateral changes.
Paternity Bereavement Leave
A day-one right to paternity leave for bereaved partners is expected in 2025, ensuring leave eligibility even without the 26-week minimum service requirement. This right will cover fathers, partners, and parents in adoption or surrogacy arrangements.
Emerging Trends and Consultations
Employment Rights Bill
While many reforms in the Employment Rights Bill will not take effect until 2026, consultations in 2025 will set the groundwork for:
- Unfair dismissal protections from day-one.
- Restrictions on fire and rehire practices.
- Guaranteed hours for zero-hours employees.
Focus on Workplace Culture
Employers are under increasing pressure to foster inclusive and safe workplace environments. Recent developments include:
- Strengthened obligations to prevent sexual harassment.
- Consultations on the ‘right to disconnect’ from work.
Preparing for 2025
To stay ahead of these changes, employers should implement the following:
- Review policies and procedures.
- Train staff on new compliance and workplace culture expectations.
- Audit pay to ensure compliance with minimum wage laws.
- Engage with ongoing consultations to prepare for 2026 reforms.
2025 marks another busy year for UK employment law, with immediate changes and consultations setting the stage for even more reforms in the coming years. At CoLaw, we are here to guide you through these developments, ensuring your business is compliant and prepared.