Employment Law – What’s Coming In 2025

2025 is set to be an exciting year for employment law changes, following the introduction of the Employment Rights Bill in October 2024. The Government has cited that some proposals under the Bill won’t come into effect until 2026, the Bill is expected to receive Royal Assent this year and consultations on many of the proposals will begin in 2025.

Employers will need to keep up to date with how the proposals develop this year, and use this time to prepare for the changes ahead of next year.

CHANGES TAKING EFFECT 2025!

Increases to National Minimum Wage 

New National Minimum Wage rates will be set to take effect from 1 April 2025.

The National Living Wage will rise from £11.44 to £12.21 per hour, for workers aged 21 and over. There will also be an increase in the rate for workers aged 18-20, from £8.60 to £10.00 per hour.

The new rates are as follows:

• National Living Wage for Ages 21plus from £11.44 to £12.21
• 18-20 Year Old Rate to increase £8.60 to £10.00
• 16-17 Year Old Rate to increase £6.40 to £7.55
• Apprentice Rate to increase from £6.40 to £7.55
• Accommodation Offset to increase from £9.99 to £10.66

Increases to Statutory Sick Pay and Other Benefits

6 April 2025, statutory sick pay will increase from £116.75 to £118.75 per week.

7 April 2025, statutory rates of maternity, paternity, adoption, shared-parental and parental bereavement pay will increase from £184.03 to £187.18 per week.

The earnings threshold to qualify for maternity, paternity, adoption, shared-parental and parental bereavement pay will increase from £123 per week to £125 per week.

The Neonatal Care (Leave and Pay) Act 2023

The Neonatal Care (Leave and Pay) Act 2023 is expected to take effect in April 2025.  The Act will introduce a new type of statutory leave and pay for parents’ babies who need neonatal care.

Neonatal care leave will be a “day one” right for employees whose babies are hospitalised for medical or palliative care of at least seven consecutive days, within the first 28 days of birth.

The length of the leave will depend on how long the baby is in hospital however the leave will be from one week up to a maximum of 12 weeks, in addition to existing parental leave entitlements. The leave can be taken at any time within the first 68 weeks following the baby’s birth.

To qualify for neonatal care pay, employees must have at least 26 weeks of continuous service and earn the lower earnings limit.

The Paternity Leave (Bereavement) Act 2024

The Paternity Leave (Bereavement) Act 2024 is expected to take effect in 2025, with no specific date confirmed. The Act will make paternity leave a “day one” right for bereaved partners where the mother of the child or the adoptive parent dies shortly after the child’s birth.

Draft Equality (Race and Disability) Bill

The Government plans to introduce a draft Equality (Race and Disability) Bill, which will specifically set out the right to equal pay for ethnic minorities and disabled people, making it easier for them to issue pay discrimination claims.  It has been cited that the draft Bill will be published in 2025, and that it will be subject to consultation.

Employment Rights Bill 

The Employment Rights Bill proposes to make changes to employment rights including,

• the removal of the two year qualifying period for unfair dismissal claims
• proposes changes to the “day one” rights for paternity, parental and bereavement leave;
• Putting an end to zero hours contracts;
• A strong focus on preventing  “fire and rehire” in the workplace
• amending the thresholds for collective redundancy consultation;
• amending the flexible working rights
• amending statutory sick pay eligibility
• amending employer’s duty to prevent sexual harassment in the workplace
• increasing protection from dismissal for pregnant women
• extending the time limits for bringing Employment Tribunal claims from three months to six months

Employment Tribunal Reforms

The New Employment Tribunal Reforms came into effect on 6 January 2025.  There are not many significant changes however employers should refer to the new rules moving forward, particularly when communicating with the Employment Tribunal.

Employers must submit the response Form ET3 online, by post or by hand and can no longer submit this by e-mail (save for in exceptional circumstances).