Employment Law – What’s Coming In 2025

Employment law – what’s coming in 2025:

The year 2025 is expected to bring significant changes to employment law, following the introduction of the Employment Rights Bill in October 2024. While the Government has confirmed that some proposals under the Bill will not take effect until 2026, the Bill is still expected to receive Royal Assent this year, and consultations on many of its key proposals will commence in 2025, so employers must stay informed and prepare accordingly.

Employers will need to monitor the development of these proposals throughout the year, as early preparation will be essential to ensuring compliance with the upcoming changes in 2026 and beyond.

CHANGES TAKING EFFECT 2025

Increases to National Minimum Wage 

The new National Minimum Wage rates will take effect from 1 April 2025, bringing increases across all age groups. The National Living Wage for workers aged 21 and over will rise from £11.44 to £12.21 per hour, and workers aged 18-20 will see their rate increase from £8.60 to £10.00 per hour.

The updated rates are as follows:

• Ages 21+: £11.44 → £12.21
• Ages 18-20: £8.60 → £10.00
• Ages 16-17: £6.40 → £7.55
• Apprentice Rate: £6.40 → £7.55
• Accommodation Offset: £9.99 → £10.66 

Increases to Statutory Sick Pay and Other Benefits

From 6 April 2025, statutory sick pay will increase from £116.75 to £118.75 per week, and from 7 April 2025, statutory payments for maternity, paternity, adoption, shared parental, and parental bereavement leave will rise from £184.03 to £187.18 per week.

Additionally, the earnings threshold required to qualify for these payments will increase slightly, rising from £123 per week to £125 per week, meaning more employees may become eligible for statutory benefits.

The Neonatal Care (Leave and Pay) Act 2023

Expected to come into effect in April 2025, this Act introduces a new statutory leave entitlement for parents whose babies require neonatal care. Because neonatal care leave will be a “day one” right, employees will not need to meet any minimum service requirements, but their baby must have been hospitalized for at least seven consecutive days within the first 28 days of birth.

The length of leave will depend on how long the baby remains in hospital, with eligible employees being entitled to between one and twelve weeks of leave, in addition to existing parental leave entitlements. Because neonatal care pay will not be a “day one” right, employees must have at least 26 weeks of continuous service and earn above the lower earnings limit to qualify.

The Paternity Leave (Bereavement) Act 2024

The Paternity Leave (Bereavement) Act 2024 is expected to take effect sometime in 2025, but no confirmed date has been set. This Act will grant bereaved partners a “day one” right to paternity leave if the mother of the child or the adoptive parent dies shortly after the child’s birth. 

Draft Equality (Race and Disability) Bill

The Government also plans to introduce a draft Equality (Race and Disability) Bill, which aims to clarify and strengthen protections against pay discrimination for ethnic minorities and disabled workers. As a result, employees in these groups will find it easier to bring pay discrimination claims, and the draft Bill is set to be published in 2025 before undergoing 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

Employers should monitor updates closely and begin preparing for these changes in advance, as they could significantly impact workplace policies and procedures.

Employment Tribunal Reforms

The new Employment Tribunal Reforms, which took effect on 6 January 2025, did not introduce major substantive changes, but employers must still familiarize themselves with updated procedures. Because of the new rules, employers must now submit response Form ET3 online, by post, or by hand, but email submissions will no longer be permitted, except in exceptional circumstances.

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