It’s officially April which means even more employment law updates have come in to force. As you will be aware there are key updates that have emerged that will impact businesses and it’s important to ensure you are fully compliant and on the right side of employment law. Key changes include increase in statutory payments, compensation limits, and the National Insurance rise for employers. Developments in pension schemes and the Neonatal Care (Leave and Pay) Act 2023 will also be discussed. Treat this as your checklist to ensure compliance and navigate the months ahead confidently.
National Minimum Wage
From 1st April 2025, the National Minimum Wage for 18-20 year olds increased from £8.60 to £10. The increase in the rate for 18 to 20-year-olds reduces the gap with the National Living Wage. Therefore, aligning with plans to extend the adult rate to include 18-year-olds in the future.
The National Living Wage (NLW) for employees aged 21 and over has increase by 6.7 per cent. Therefore, the new hourly rate for NLW workers has risen from £11.44 to £12.21. For full-time employees, these employment law updates represent an annual pay increase of approximately £1,400.
Baroness Philippa Stroud, Chair of the LPC, said:
The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years. In addition, the challenges that has created alongside other pressures to their cost base.
Updated Statutory Payments
A range of statutory payments will increase on 6 April including statutory sick pay, and statutory parental pay.
Statutory Sick Pay
Other employment law updates include the SSP increase. Statutory Sick Pay is set to rise from £116.75 to £118.75 per week in the 2025/2026 financial year. Additionally, the Lower Earnings Limit, which is the minimum weekly earnings required for employees to qualify 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 parental bereavement pay, will increase from £184.03 to £187.18 per week. Additionally, the Lower Earnings Limit—the weekly earnings threshold for eligibility for all these payments, except maternity allowance—will rise from £123 to £125.
Employment Tribunal Compensation Limits
From 6 April 2025, employment tribunal compensation limits will increase from:
- Cap on a weeks pay: from £700 to £719
- Maximum Compensatory Award: from £115,115 to £118,223
Employer National Insurance Increase
We’re sure all businesses are aware of the employer national insurance increase becoming law from 6 April 2025. As part of the employment law updates, the employer NI rate will increase from 13.8% to 15%, adding additional costs for employers on earnings above the threshold. Furthermore, the annual earnings threshold for employer NI contributions will be lowered from £9,100 to £5,000, meaning employers will need to start paying NI contributions on a greater portion of their employees’ earnings.
To support smaller businesses in managing these increased costs, the employment allowance—a relief that reduces the amount of NI contributions smaller employers need to pay—will increase significantly, rising from £5,000 to £10,500. This measure aims to offset the financial burden on smaller organisations and help them remain sustainable while ensuring compliance with the updated requirements.
These employment law updates highlight the importance of reviewing payroll processes and budgeting for the additional costs to avoid unexpected financial challenges. Employers are encouraged to seek advice or review their financial planning to ensure they can effectively adapt to these adjustments.
Neonatal Care (Leave and Pay) Act 2023
The Neonatal Care Act will come in to force on 6 April. This Act will grant employees up to 12 weeks of paid leave if their baby is admitted to hospital. This applies to babies admitted within their first 28 days of life who have a continuous 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 parental leave rights.
This new entitlement aims to provide vital support for parents during challenging circumstances, ensuring they can prioritise their baby’s care without financial or professional penalties.
Gender Pay Gap Reporting Deadlines
Employers with 250 or more employees are legally required to submit their gender pay gap data by the relevant deadlines, which vary depending on whether they operate in the public or private sector. These reporting obligations have not changed; however, it is essential that employers continue to review their processes to ensure that all data collection and reporting activities are accurate, complete, and submitted on time. Staying compliant with these requirements is key to maintaining transparency and avoiding potential penalties.
Reporting deadlines include:
- Private Sector: 4 April 2025
- Private/Voluntary: 30 March 2025
Other Employment Law Updates
Agency workers (zero hours contracts):
- New rights to guaranteed hours, reasonable shift notice, and compensation for last-minute changes
- Aimed at closing loopholes allowing agency workers to cover zero hours gaps when restrictions apply
Collective consultation – redundancy:
The threshold for triggering consultation will change to:
- 20 or more workers at one establishment or
- A certain number/percentage of affected employees across the organisation
Further legislation will follow to clarify application
Protective award (collective redundancy):
Tribunals may double the Protective Award from 90 to 180 days’ gross pay if consultation duties are breached
Fire and rehire:
Automatically unfair dismissal where the same or similar role is re-engaged after dismissal
Unfair dismissal and detriment:
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Probationary periods can now be included in detriment calculations
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No reduction in compensation due to probationary status
Working time records:
Employers must retain certain annual leave and pay records for six years.
Draft Equality (Race and Disability) Bill
The Government plans to consult on The Equality (Race and Disability) Bill, focusing on pay gap reporting improvements.The Bill will require organisations with over 250 employees to report ethnicity and disability pay gaps transparently.
This builds on gender pay gap reporting, aiming to highlight wage disparities and promote fairness in organisations. By increasing transparency, the updates aim to address systemic inequalities and encourage fair pay practices. Employers must ensure robust data collection and reporting processes to meet these new obligations effectively. These changes seek to foster a more inclusive and equitable workplace for all employees.
Another focus will be on equal pay and outsourcing. New measures will be introduced to strengthen equal pay rights for workers facing discrimination based on race or disability. These provisions aim to ensure that all employees receive fair and equal remuneration for work of equal value, regardless of their background or circumstances. To reinforce these protections, employers will be explicitly prohibited from using outsourcing or subcontracting arrangements to bypass their equal pay obligations.
The Bill will need to undergo parliamentary debate before it can become part of the list of employment law updates for this year. However, it’s expected to be introduced during this parliamentary session, likely by spring 2025.
Secretary of State for Education and Minister for Women and Equalities, Bridget Phillipson MP, said:
We know too many people across our country face unjust barriers, and that’s why we will ensure equality and opportunity are at the very heart of all our missions.
I am proud to stand alongside our strong Women and Equalities Ministerial team, working tirelessly to address the root causes of inequalities and socio-economic disadvantage.
