It is true – employment law is on the brink of its most significant transformation in recent years.
With the Employment Rights Bill setting the stage for sweeping changes and with many more regulations still in the pipeline, businesses need to start preparing now for what lies ahead.
Whether you’re a small business owner or an HR professional, understanding and adapting to these changes will be crucial for workplace success in 2025 and beyond. In our most recent article, we will be discussing some of this year’s biggest employment law updates and how you can position your business in the best way possible as these changes begin to take effect.
April’s Increased Pay Rates
As we look ahead to April 2025, several key financial changes are expected to make an impact on businesses across the UK.
From April 1st, 2025, the National Living Wage and National Minimum Wage will increase as follows:
- For those 21 and over, the National Living Wage will increase from £11.44 to £12.21 an hour.
- For those aged 18-20, wages will increase from £8.60 to £10.00 an hour.
- For those aged 16-17, wages will increase from £6.40 to £7.55 an hour.
Alongside this, Statutory Pay Rates will also see an increase.
Statutory Sick Pay is set to rise from £116.75 to £118.75 per week, with a qualifying threshold of £125 weekly. With the new Employment Rights Bill, sick pay may become payable from the first day of absence. However, it is expected that this change will come next year.
Statutory maternity, paternity, adoption, shared parental, bereavement, and maternity allowance pay are all also expected to see increases from £184.03 to £187.17 per week.
Businesses should begin considering these anticipated increases in their financial planning.
The Neonatal Care Act Comes Into Effect
One very significant confirmed change coming in April 2025 is the implementation of the Neonatal Care Act.
First receiving its royal assent in 2023, this groundbreaking legislation will provide parents with up to 12 weeks of leave if their baby requires neonatal care. As a day-one right, employees won’t need any minimum service to qualify, representing a significant enhancement to family-friendly rights in the workplace.
The flexibility built into this legislation allows parents to take the leave in blocks of one week up to the maximum entitlement (12 weeks). This allows parents to receive crucial support during what can be an extremely challenging time. Employers should begin preparing their policies and procedures now to ensure they can effectively support employees who need to take this leave.
The Introduction of the Equality (Race and Disability) Bill
While we are still awaiting the introduction of this new bill, we do have some insight into what it will entail. This bill intends to address pay gaps based on race and disability, creating more egalitarian workplaces that offer opportunities for all.
This will likely be done by mandating pay gap reporting to include minority and disability in organisations of over 250 employees. That way, employers will be encouraged to consider whether these pay gaps exist in their organisation, and how they can proactively close these gaps.
Other aspects of the bill are awaiting confirmation, but we do not doubt that it will present another huge transformation for businesses.
To prepare for these upcoming equality reporting requirements, employers should begin laying the groundwork now. A thorough review of your current pay structures and data collection methods will be essential. Consider conducting a voluntary internal audit of your pay data across different employee groups to identify any existing gaps or areas of concern before reporting becomes mandatory.
It’s also worth reviewing your recruitment, promotion, and development processes to ensure they promote equal opportunities for all employees.
Timelines for Other Changes
While the Employment Rights Bill is expected to be passed in mid-2025, it is expected that many of the upcoming changes outlined in the bill will not come into effect until 2026.
This means that some of the largest expected changes, such as day-one unfair dismissal rights and reforms to the zero-hour contract, will not be coming into effect until next year.
Practical Steps for Businesses
Rather than waiting for these changes to take effect, forward-thinking businesses should begin their preparation now. Start by reviewing your current policies against the expected changes and identifying any gaps in your documentation. Your employee handbooks will likely need updating, and recruitment processes may need adjusting to reflect new day-one rights.
Training will be crucial for successful implementation. Consider how you’ll brief managers on the upcoming changes and ensure your HR teams are fully prepared. Documentation will need careful attention – from creating templates for new leave types to updating contract templates and absence management procedures.
When planning implementation, consider creating a clear timeline that includes:
- Key dates for policy updates
- Training schedules for managers and staff
- Communication plans for employees
- Review points to assess effectiveness
The key is to use 2025 as a planning and implementation year. Start by auditing your current practices, identifying where changes will be needed, and creating a structured timeline for updates. This proactive approach will help avoid any last-minute scrambles and ensure your business is fully prepared when these significant changes come into force.
Remember, major organisational changes take time to embed effectively. By starting your preparation now, you’ll have time to consult with stakeholders, trial new approaches, and make any necessary adjustments before the legal requirements take effect.
Conclusion
No matter how your business will be affected, we believe that the scale of these changes means preparation should start now. Early planning will help ensure a smooth transition and maintain compliance while supporting your workforce effectively. Regular progress reviews and staying informed about confirmed dates and requirements will be essential.
At Petaurum HR, we understand that navigating these changes can feel overwhelming. That’s why we’re here to support your business through this transition. Whether you need help updating policies, delivering training, or simply want to discuss how these changes might affect your organisation, our team of HR experts is ready to help ensure you’re prepared for what’s ahead.
Want to learn more about the Employment Rights Bill? You can read more here.