A Year of Change for Employers and Employees
In October 2024, the Employment Rights Bill was introduced in Parliament, bringing an end to weeks of speculation about its potential impact. While the bill’s major legal reforms are expected to take effect in 2026, there are still significant employment law changes coming in 2025 that businesses must prepare for now.
From new statutory rates to paternity leave laws and consultation requirements, here’s what employers need to know—and what actions to take now to stay compliant.
Key Employment Law Changes in 2025
- Rolled-Up Annual Leave for Part-Year and Irregular Hours Workers
Employees working part-year or irregular hours will see changes to how their annual leave is calculated, particularly for those with leave years running from January to December. - Extension of the 25% Uplift for Breaching the New Statutory Code on Dismissal and Re-engagement
Employers must comply with the statutory code of practice on dismissal and re-engagement, or they could face a 25% uplift in compensation claims from affected employees. - New Statutory Rates Effective April 2025
Employers must adjust wages in line with the updated National Minimum Wage, Statutory Sick Pay, and family-related leave payments. - Real Living Wage Increase Deadline
Employers accredited with the Real Living Wage must raise pay to £12.60 across the UK and £13.85 in London by May 1, 2025, to retain accreditation. - Paternity Leave (Bereavement) Act 2024 Comes Into Force
Expected to be implemented in 2025, this new law extends leave entitlements for bereaved parents, requiring employers to adjust their leave policies accordingly. - Neonatal Care Leave and Pay
The long-awaited Neonatal Care (Leave and Pay) Act 2023 is expected to come into force in April 2025, providing eligible employees with time off to care for a newborn receiving neonatal care.
Actions Employers Should Take Now
- Review Contracts for Part-Year and Zero-Hour Workers
- Identify employees on part-year or zero-hour contracts.
- Assess how their annual leave is currently calculated and whether adjustments are required under the new law.
- If unsure, seek expert HR advice to ensure compliance.
- Prepare for New Consultation Requirements on Contract Changes
- From January 20, 2025, employers must collectively consult with employees before implementing changes to employment terms through dismissal and re-engagement.
- Failing to do so could result in a protective award of up to 90 days’ pay per affected employee.
- If an employer also breaches the statutory code, an employment tribunal could apply an additional 25% compensation uplift.
- Adjust Wages for April 2025
- Ensure all eligible staff receive pay increases in line with new statutory rates:
- National Living Wage (21+): £12.21 per hour
- 18-20 Year Olds: £10 per hour
- 16-17 Year Olds & Apprentices: £7.55 per hour
- Statutory Sick Pay: £118.75 per week
- Statutory Maternity Pay & Family Leave Pay: £187.18 per week
- Lower Earnings Limit: £125 per week
- Plan for Real Living Wage Increases
- If your business is accredited with the Real Living Wage Foundation, ensure salaries rise to meet new thresholds by May 1, 2025.
- Update Policies to Reflect Paternity Leave (Bereavement) and Neonatal Care Leave
- Employers should prepare to update their leave policies once the government confirms the implementation dates for these new rights.
How Nectar HR Can Support You
At Nectar HR, we make employment law compliance seamless by offering tailored support to businesses of all sizes. Here’s how we can help:
✅ Contract Reviews & Compliance Checks
- We can review your contracts for part-year and irregular-hour workers and advise on rolled-up holiday pay and necessary adjustments.
✅ Consultation Support
- If you need to change employees’ terms and conditions, we provide practical advice and guidance to ensure compliance with legal requirements.
✅ Policy Development & Updates
- Need to create or update policies for statutory leave, pay increases, or dismissal procedures? We’ve got you covered.
✅ Ongoing Employment Law Updates
- With more reforms on the horizon, we’ll keep you informed of changes as they happen and help you stay ahead of compliance risks.
📞 Need HR advice? Contact us today to ensure your business is prepared for 2025’s employment law changes.
Final Thoughts
Staying compliant with evolving employment laws is essential to protecting your business and supporting your workforce. By taking action now, employers can avoid costly legal pitfalls and create a fairer, more inclusive workplace.
With expert guidance from Nectar HR, you can navigate these changes with confidence. Are you ready for these changes?