Employment Law Update – April 2025
Today we bring you the April 2025 changes to employment law.
In addition to the usual updates to minimum wage rates and other allowances, employers will face new requirements concerning neonatal leave, redundancy, and increase in national insurance contributions (NICs). We’re sure you’re aware of the latter as your accountant will have been demonstrating budget implications.
Many of you have been asking about some of the promises made by the incoming Labour Government. The Employment Rights Bill is still being debated in Parliament and we cover more on this in our latest blog post – https://www.launchpadassociates.co.uk/top-tips-to-prepare-for-the-employment-rights-bill-becoming-law/
This article focuses on the new obligations coming into effect this month.
Minimum Wage
Starting 1 April 2025 the new national minimum wage rates across all age groups is implemented.
The national living wage will increase to £12.21 per hour, and for the first time, this rate will apply to workers aged 21 and older, instead of 23 and
above, extending its coverage.
Employees aged 18 to 20 will see a £1.40 rise to £10.00 per hour, while the minimum wage for 16-17-year-olds will be set at £7.55.
Apprentices will also be entitled to at least £7.55 per hour.
Statutory Sick Pay
Statutory Sick Pay (SSP) will increase by £2 to £118.75 per week. The eligibility threshold for receiving SSP will also rise to £125 per week.
The most significant change, however, is the removal of the three-day waiting period for SSP, which could lead to an increase in short-term absences.
National Insurance
Increase in Employer NICs starting 6 April will increase from 13.8% to 15%. Additionally, the threshold at which employers are required to pay NICs will drop from £9,100 to £5,000. This lower threshold will remain until 5 April 2028, increasing the financial burden on employers. To offset some of this impact, the employment allowance, which helps eligible employers reduce their NICs bill, will rise from £5,000 to £10,500.
Moreover, the £100,000 eligibility cap will be removed, potentially allowing
more employers to benefit.
New Rights for Parents
A new, more supportive measure for working parents will be introduced in April with the introduction of neonatal care leave and pay. From 6 April, parents of babies admitted to neonatal care will be entitled to up to 12 weeks of statutory leave and pay.
Clients, no need to worry we have you covered! You may opt for a stand alone policy or we can include it in your family policies.
This is a day one right, although eligibility for pay will still depend on continuity of service and minimum earnings thresholds. The statutory flat rate of pay will be £187.18 per week or 90% of average weekly earnings, whichever is lower.
The right to leave is triggered once the baby has been in neonatal care for at least seven consecutive days, and the leave must be taken within 68 weeks of the child’s birth.
Employers are encouraged to approach this new entitlement with compassion and understanding.
Uplift in Parental Leave Pay In addition to neonatal care leave, family related statutory pay will also rise in April. Maternity, paternity, adoption, and shared parental pay will all increase to £187.18 per week, or 90% of the employee’s average weekly earnings, whichever is lower. The earnings threshold for these payments will also rise from £123 to £125 per week.
Maternity allowance, paid separately through Jobcentre Plus, will remain unchanged at £30 per week.
Employees on carer’s allowance will see their weekly earnings threshold increase from £151 to £196, with a rise in their weekly payment to £83.30.
Redundancy & Tribunal Updates
There will be increases in statutory limits for redundancy and tribunal awards. The maximum amount used to calculate a week’s pay for redundancy will rise from £700 to £719. For unfair dismissal cases, the cap on compensatory awards will increase from £115,115 to £118,223, and the maximum award for unlawful inducement related to trade union membership will rise from £5,000 to £5,735.
Our professional institute, the CIPD have reported, the rising compensation limits for unfair dismissal should serve as a wake-up call for employers who aren’t prioritising employee relations. Their representative stressed the importance of proactive employee relations strategies to prevent conflicts and mitigate the financial, emotional, and reputational costs of disputes.
As Always We Are Here to Help.
We aim to keep you informed and ensure your business is compliant with the new regulations.
Do not hesitate to get in touch if we can help you further. Get in touch!
