With some important employment law changes coming into effect in 2025, Emma-Louise Hewitt, partner and head of the Employment Law team at law firm Sydney Mitchell, highlights key areas of change to help employers navigate the year ahead.
What employment law changes do HR teams need to be aware of in 2025?
Every one of the changes to UK employment law this year are set to transform workplace rights, from enhanced parental leave to mandatory pay gap reporting, wages, and employer responsibilities. It is essential employers prepare now to be ready for the changes.
Below are the five biggest employment law changes in 2025 and what employers must do to be ready for them.
Gender pay gap reporting
Submit your gender pay gap report (30 March 2025)
Businesses and organisations with 250 or more employees need to report annually on their gender pay gap using a specified ‘snapshot date’. The snapshot date is always the 31 March for public authorities and 5 April for all other employers, in any year in which the organisation has 250 or more relevant employees.
Put the relevant date in diaries and start collating the information to go into the report immediately. Reports must include:
- basic pay
- piecework pay
- shift premiums
- paid leave
- allowances
- any bonus pay (both personal and team bonuses)
Next, begin work on the narrative and action plan surrounding the report to get it ready for submission on or before your snapshot deadline submission date. This is not mandatory, but it is encouraged by the government.
National Minimum Wage
Implement National Minimum Wage increases (1 April 2025)
The National Minimum Wage (NMW) increase comes into effect on 1 April 2025:
- For 21-year-olds and over, NMW will increase to £12.21 per hour (an increase of £0.77)
- For 18 to 20-year-olds, NMW will increase to £10.00 per hour (an increase of £1.40)
- For 16 to 17-year-olds, NMW will increase to £7.55 per hour (an increase of £1.15)
Make sure these dates are in the diary, ensure payroll are aware of the date and relevant change, and that 2025/2026 budgets take the increases into account.
Family-related pay and Statutory Sick Say
Increase statutory family-related pay and Statutory Sick Pay (6 April 2025)
From April 2025, many of the statutory payment rates increase:
- Statutory Sick Pay (SSP) will increase to £118.75 per week from £116.75 per week, with a qualifying threshold of £125 per week.
- Statutory maternity pay, maternity allowance, statutory adoption pay, statutory share parental pay, statutory paternity pay, and parental bereavement pay will increase to £187.18 per week from £184.03.
- The Lower Earnings Limit (LEL), which is the weekly earnings threshold for qualifying for the above payments (besides maternity allowance), will increase to £125 per week, but the maternity allowance threshold will remain at £30 per week.
- The Neonatal Care (Leave and Pay) Act 2023 is expected to come into force on 6 April 2025 (subject to Parliamentary approval). This will apply to parents of 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. These measures will allow eligible parents to take up to 12 weeks of leave (and, if eligible, pay) on top of any other leave they may be entitled to, including maternity and paternity leave. This will be a ‘day one right’ for all employees.
- Again, put the date the changes take effect in the diary, ensure payroll teams and individuals are aware, update any policies or procedures to include these changes, and notify employees.
Redundancy pay
Update your statutory redundancy pay sums (6 April 2025)
From the 20 January 2025, tribunals are now able to award a 25% uplift for failing to comply with the statutory Code of Practice on dismissal and re-engagement on protective awards.
This applies when an employer proposes to change employee terms via dismissal and re-engagement that affects 20 or more employees, which triggers the need to collectively consult. Failing to do this can result in a protective award for all affected workers of up to 90 days’ pay. Where the employer also fails to comply with the code, that award could be uplifted by up to 25% by the employment tribunal.
The new limits for the new redundancy pay rates (yet to be announced) will apply, and it is anticipated that these are set to increase. Keep an eye out for updates, which are usually around March.
Employment Rights Bill
Keep track of the Employment Rights Bill (all year)
Published in October 2024, the Employment Rights Bill is the government’s first phase of its plan to Make Work Pay, which includes 28 individual reforms aimed at improving job security, boosting pay, and increasing productivity to allow for work-life balance. Consultations on the reforms begin this year, and many of the reforms are unlikely to take effect until 2026.
The reforms will include the anticipated unfair dismissal reform removing the two-year qualifying period for protection from unfair dismissal.
Planning and planning early is essential. Adopting this proactive approach will help manage the workload in 2026. Start with reviewing policies as and when details of the reforms are announced. Also, look at training requirements for any managers especially given the removal of the current two-year qualifying period for unfair dismissal.
Employers should prepare for the vast changes which are coming into force in 2025 and use this year as an opportunity to start planning for the number of additional changes coming in 2026.
About the author
Emma-Louise Hewitt is Partner and Head of the Employment Law Department at Midlands law firm Sydney Mitchell LLP. Specialising in all areas of Employment Law, Emma-Louise acts for both employees and employers in a range of areas. This includes drafting contracts, handbooks, policies and procedures, advising on potential Employment Tribunal claims such as unfair dismissal and wrongful dismissal, guidance on restructuring and redundancy, and providing general day to day employment law advice and support to business owners, managers and HR advisors.
This article was first published by The Gazette on 17 February 2025. View the original article here: Employment law 2025: Five key tasks for HR | The Gazette
 |
 |
 |
 |
 |
 |
|
