What Are the 2025 Employment Law Updates?
April 2025 brings some of the most significant changes to UK employment law in recent years.
With updates impacting pay, leave entitlements, and National Insurance contributions, alongside the incoming Employment Rights Bill, employers must act now to remain compliant and avoid unnecessary risk.
At Park City Consulting, we work with businesses across all industries to navigate employment law with confidence.
This guide outlines the changes taking effect this April, what they mean for your business, and the steps you need to take today.
Key 2025 Employment Law Updates 2025 from April
National Minimum and Living Wage Increases
Effective from the 1st of April 2025:
- The National Living Wage (for workers aged 21 and over) increases by 6.7%, from £11.44 to £12.21 per hour.
- The National Minimum Wage for 18-20 year olds increases by 16.3%, from £8.60 to £10.00 per hour – the largest increase on record.
- The Apprentice Rate and the rate for workers under 18 increases by 18%, rising from £6.40 to £7.55 per hour.
This is part of the government’s broader plan to move toward a single adult rate over time.
What you need to do: Review all pay structures to ensure compliance by the 1st of April. Update payroll systems and inform your finance and HR teams.
National Insurance Contributions (NICs)
Effective from the 6th of April 2025:
- Employer NICs will increase from 13.8% to 15%.
- The earnings threshold for employer contributions drops from £9,100 to £5,000 per year.
- To offset the impact, the Employment Allowance increases to £10,500, meaning over 800,000 employees will not pay any NICs next year.
What you need to do: Assess your payroll costs and determine eligibility for the increased Employment Allowance.
Statutory Pay Increases
Also from the 6th of April 2025:
- Statutory Sick Pay increases to £118.75 per week (up from £116.75).
- Statutory Maternity Pay, Paternity Pay, Shared Parental Pay, Adoption Pay, and Parental Bereavement Pay will rise to £187.18 per week (up from £184.03).
- The Lower Earnings Limit for qualifying for most statutory payments increases to £125 per week.
What you need to do: Make sure all payroll systems and employment contracts reflect these new rates from the 6th of April.
New Leave Entitlement: Neonatal Care Leave
From the 6th of April 2025, eligible parents will be entitled to up to 12 weeks of paid leave if their newborn is admitted to neonatal care. This leave is in addition to maternity or paternity leave.
What you need to do:
- Update your family leave policies.
- Ensure your HR team and managers are trained on eligibility and entitlements.
- Communicate this change clearly to employees.
Paternity Leave (Bereavement) Changes
The Paternity Leave (Bereavement) Act 2024 removes the 26-week qualifying period where the mother or adoptive parent dies within the first year of birth or placement. This change is awaiting implementation.
What you need to do: Stay informed of the rollout date and prepare policy updates in advance.
Employment Rights Bill: What’s Coming
The Employment Rights Bill, introduced in October 2024, proposes significant changes, though most will not come into effect until 2026. However, a few key updates may affect employers this year, including:
- Changes to collective consultation thresholds.
- Repeal of certain trade union and industrial action regulations.
- Consultations on other parts of the Bill, including unfair dismissal rights from day one and employer liability for third-party harassment, are underway or expected soon.
What you need to do: Monitor the status of these changes and take part in consultations where your organisation may be affected. Park City Consulting will you informed of each new update and consultation window.
Other Important Updates
Compensation Limits
From the 6th of April 2025, compensation limits for claims such as unfair dismissal and redundancy will increase.
What you need to do: Make sure managers understand the updated compensation risks when handling employee exits or disputes.
Immigration Fees
From the 9th of April 2025, fees for visas, sponsorship certificates, and related processes will increase, with some categories rising by as much as 120%.
What you need to do:
- Review upcoming visa applications and consider submitting them before the 9th of April.
- Factor the cost increases into recruitment planning.
Why This Matters for Employers
- Failing to take action could expose your business to:
- Financial penalties for non-compliance.
- Increased costs due to payroll miscalculations or incorrect statutory payments.
- Legal risks from outdated policies or employment terms.
- Missed entitlements leading to employee grievances and reputational harm.
At Park City Consulting, we’re on hand to provide Employment Law Advice to help you navigate change, manage risk, and build strong, compliant HR foundations.
2025 Employment Law Updates Checklist
- Update contracts and employee handbooks with new statutory rates.
- Audit payroll for compliance with new National Minimum and Living Wage requirements.
- Review HR systems and training for neonatal care, bereavement, and statutory leave changes.
- Check your NICs exposure and eligibility for the increased Employment Allowance.
- Track consultations on the Employment Rights Bill and prepare feedback where relevant.
- Revisit immigration plans in light of fee increases.