Employment Law Updates

There are key changes to employment legislation and statutory rules happening in April 2025 that UK employer’s should be aware of.

Statutory rate increases

From 1 April 2025 the national minimum wage and national living wage will increase to:

• £12.21 per hour for those aged 21 and over
• £10 per hour for 18–20 year olds
• £7.55 per hour for 16 -17 year olds and apprentices.

The accommodation offset daily allowance will also increase to £10.66.

From 6 April 2025, the statutory weekly sick pay rate will increase to £118.75. The weekly rates for statutory maternity, paternity, adoption, shared parental and parental bereavement pay will increase to £187.18. The minimum earnings threshold for these payments will also increase to £125.

Employers will pay a higher National Insurance Contributions (NI) rate of 15%. Additionally, the threshold for starting to pay NI will reduce to £5000. To support smaller businesses the employment allowance will be raised to £10,500.

Employers should ensure that payroll systems are updated to reflect the new rates and avoid underpayments.

Increases to employment tribunal awards

From 6 April 2025 there will be increases to compensation amounts for successful claims at tribunal. These include:

• the cap on a statutory week’s pay (including redundancy and unfair dismissal basic awards) increases to £719
• the maximum basic award for statutory redundancy and unfair dismissal increases to £21,570
• the maximum compensatory award for unfair dismissal increases to £118,223
• the additional award for unfair dismissal increases to £18,694-£37,388
• statutory guarantee pay increases to £39 per day (up to 5 days or £195 in any 3 months).

The injury to feeling awards in discrimination and whistleblowing cases (known as the Vento bandings) will also increase to:

• £1,200 -£12,100 for the lower banding
• £12,100 - £36,400 for the middle banding
• £36,400 - £60,700 for the upper banding

Exceptional cases can be awarded higher than this.

Neonatal Care (Leave and Pay) Act 2023

From 6 April 2025 a new statutory right will be introduced to help support parents of babies in neonatal care. This will apply to employees with babies needing care in a neonatal unit for 7 continuous days or more within 28 days of birth.

Employees who are the parent, or have responsibility for the babies upbringing, have a day one right to up to 12 weeks leave. Eligible employees with at least 26 weeks’ continuous employment can receive statutory neonatal pay for up to a maximum of 12 weeks (set at the same rate as other statutory parental leave such as SMP).

The notice requirements for taking neonatal care leave will vary depending on the when the leave is taken. Tier 1 leave is taken while the baby is still receiving care, or in the week following the end of care. No advance notice is required for this, and the leave can be taken in non-consecutive weeks. Tier 2 leave is taken after this period, requires at least 15 days’ notice, and the leave must be taken consecutively. Employers can use discretion if they wish to give employees flexibility.

Employees will have the right to not be dismissed or discriminated against for requesting or taking a period of neonatal care leave.

There will also be special redundancy protection (the right to be offered any suitable alternative vacancy in a redundancy situation) for 18 months after the babies birth where the employee is taking at least 6 consecutive weeks neonatal care leave.

If you need further advice, please contact our HR and Employment Advisors on 0333 043 4444 or advice@mddus.com.

We Recommend

• creating a neonatal care leave and pay policy
• training managers on the new requirements
• complying with data protection law when handling sensitive medical data
• providing wellbeing support to your employees

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