Legal update: The Employment Law changes coming into effect this April
HR Checklist for April 2025
As we approach April 2025, several important changes to employment laws and regulations will come into effect. These updates include increases to the National Minimum Wage, employers’ National Insurance Contributions, statutory payments, and various other employment-related benefits. It is essential for HR departments to stay informed and ensure compliance with these new requirements. Below is a detailed checklist of the key changes.
National Minimum Wage Increases
Effective 1st April 2025, the National Living Wage will increase to £12.21 per hour for employees aged 21 and over. Workers aged 18 to 20 will see their hourly wage rise by £1.40 to £10.00, while the rate for 16 to 17-year-olds will increase to £7.55. Apprentices must also be paid a minimum of £7.55 per hour.
Increase in Employers’ National Insurance Contributions (NICs)
Following the budget announcement in October, employers’ NICs will increase from 13.8% to 15% on 6th April 2025. Additionally, the earnings threshold for NIC liability will decrease from £9,100 to £5,000, with this threshold remaining in place until 5 April 2028.
Employers will receive some relief through the employment allowance, which will increase from £5,000 to £10,500. The existing £100,000 eligibility threshold for the employment allowance will be removed.
Lower Earnings Threshold
On the 6th April the lower earnings threshold eligibility will receive an increase from £123 to £125 per week.
Statutory Sick Pay (SSP) Increase
From 6th April, SSP will rise by £2 to £118.75 per week. Further proposals under the Employment Rights Bill may expand sick pay provisions. Workers could become entitled to 80% of their weekly earnings or the flat rate, whichever is lower, from day one of sickness.
Introduction of Neonatal Care Leave and Pay
Starting 6th April, eligible families with babies requiring neonatal care can take up to 12 weeks of neonatal care leave. Those who meet service and earnings thresholds will qualify for neonatal care pay, set at the same rate as other family leave payments, which will be £187.18 per week from April 2025.
Increased Redundancy, Statutory Guarantee Pay and Tribunal Award Limits
From 6th April, the limits for various tribunal awards will increase. The maximum weekly pay for statutory redundancy calculations will rise from £700 to £719. Statutory Guarantee Pay will also see an increase from £38 to £39 per day.
The cap on compensatory awards for unfair dismissal will increase from £115,115 to £118,223 and the maximum award for unlawful inducement relating to trade union membership or activities will also rise from £5,000 to £5,735.
Updates to Family-Related Leave Pay
From 6th April 2025, statutory maternity, paternity, adoption, and shared parental pay rates will increase from £184.03 to £187.18 per week. The earnings threshold for eligibility will also rise from £123 to £125 per week. However, the maternity allowance threshold will remain at £30 per week.
For carers, the weekly earnings threshold for carer’s allowance will increase from £151 to £196, with the weekly payment amount rising from £81.90 to £83.30.
Effective 6 April 2025, statutory parental bereavement pay will be available to eligible employees who have lost a child under the age of 18 or experienced a stillbirth after 24 weeks of pregnancy. Eligible employees can take up to 2 weeks of parental bereavement leave and receive statutory parental bereavement pay at the rate of £187.18 per week.
HR departments should review these changes carefully to ensure compliance and make necessary adjustments to payroll, policies, and employee communications ahead of the April 2025 deadlines. It is crucial to update internal systems and processes to reflect the new rates and thresholds, ensuring accurate and timely payments to employees. Additionally, HR teams should communicate these changes clearly to all staff, providing guidance on how the updates may impact their earnings and benefits.
Regular training sessions and informational meetings can help employees understand the implications of these changes and address any questions or concerns they may have. By proactively managing these updates, HR departments can maintain compliance, support employee well-being, and foster a transparent and informed workplace environment.
