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April 2025 Employment Law Changes

Following Chancellor Rachel Reeves' 2024 Autumn Budget announcement, we've outlined the key changes that will affect businesses from April 2025. Employers need to be prepared to comply with these upcoming changes to avoid potential legal issues and ensure fair treatment of their workforce.

National Minimum Wage (Effective 1st April 2025)

  • 21 years old and over's hourly rate will increase from £11.44 to £12.21.
  • 18-20 years old's hourly rate will increase from £8.60 to £10.00.
  • Under 18 years old and Apprentices' hourly rate will increase from £6.40 to £7.55

Neonatal Care (Leave and Pay) Act 2023 (Effective from 6th April 2025)

  • Currently, parents must use annual leave or other type of parental leave to care for a baby needing neonatal treatment. Due to this change, eligible employees will have a right to take up to 12 weeks’ leave in addition to existing parental leave and will be a “day one” right.
  • Statutory Neonatal Care Pay will be available to employees who meet continuity service and income requirements.

Employment Rights (Increase of Limits) Order 2025 (Effective 6th April 2025)

  • The maximum compensatory award for unfair dismissal will increase from £115,115 to £118,223.
  • The minimum award of compensation for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and working time grounds will only increase from £8533 to £8763.
  • The limit on the amount of compensatory award for failure to allocate and pay tips fairly is £5135.
  • A week’s pay for calculating the basic award for unfair dismissal and redundancy payments will increase from £700 to £719.
  • The daily rate for guarantee payment will increase from £38 to £39.

The increases apply where the event giving rise to the entitlement to compensation or other payments occurs on or after 6 April 2025.

National Insurance Contributions (Effective 6th April 2025)

  • The main rate of secondary Class 1 National Insurance contributions (NICs) will increase from 13.8% to 15%.
  • The Class 1 NICs tax-free threshold will drop from £9100 to £5000 per annum.
  • Employment Allowance (which allows eligible employers to reduce their annual NICs) will increase from £5,000 to £10,500 to help offset additional costs to small employers from the increase in NIC rates.

Statutory Pay (Effective April 2025)

  • Statutory Maternity Pay, Adoption Pay, Paternity Pay, Parental Bereavement Pay and Shared Parental Pay will increase from £184.03 to £187.18 per week.
  • Statutory Sick Pay will also increase to from £116.75 to £118.75 per week from April 2025. Under the Employment Rights Bill, sick pay could soon be payable from the 1st day of being sick however, this is not likely to take effect from April 2025.

For further guidance on current or upcoming legislative changes, please contact us at [email protected]. We are here to support you through these developments and ensure compliance with the latest regulations.

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