With the start of a new financial year, several key changes to UK employment law have come into effect from 1 April 2025. These updates impact wages, employer contributions, statutory pay, and leave entitlements.
Whether you’re an employer or an employee, it’s crucial to stay informed to ensure compliance and make the most of your rights at work.
Here’s a breakdown of the most important changes:
1. National Minimum and Living Wage Increases
The UK government has introduced new wage increases across all age brackets. The new rates, effective from 1 April 2025, are as follows:
- Workers aged 21 and over: Increased from £11.44 to £12.21 per hour.
- Workers aged 18 to 20: Increased from £8.60 to £10.00 per hour.
- Workers aged 16 to 17 and apprentices: Increased from £6.40 to £7.55 per hour.
2. Employer National Insurance Contributions (NICs) Increase
Employers will now face higher National Insurance Contributions, a key consideration for businesses when budgeting for staff costs.
From 6 April 2025:
- Employer NICs will increase from 13.8% to 15%.
- The threshold at which employers begin paying NICs has been lowered from £9,100 to £5,000 per year.
3. Statutory Sick Pay (SSP) Increase
Employees eligible for Statutory Sick Pay (SSP) will see a small increase in their weekly payments. From 6 April 2025, SSP will rise to £118.75 per week, up from £116.75.
4. Statutory Family-Related Pay Increase
For those on maternity, paternity, adoption, or shared parental leave, statutory payments are also increasing. From 6 April 2025, the weekly statutory rate will rise to £187.18, up from £184.03.
5. Introduction of Paid Neonatal Care Leave
A new statutory right for Paid Neonatal Care Leave has been introduced to support parents of babies requiring neonatal care.
- Eligible parents can now take up to 12 weeks of neonatal care leave.
- This leave is to be taken within 68 weeks of the child’s birth.
- This is in addition to standard maternity and paternity leave entitlements.
What Do These Changes Mean for Employers and Employees?
- Employers: You’ll need to update payroll systems to reflect the new wages and statutory payments, plan for higher National Insurance costs, and ensure HR policies include the new neonatal care leave entitlement.
- Employees: If you’re eligible for statutory pay increases or leave entitlements, ensure you check with your employer to confirm how these changes will be implemented.
Final Thoughts
Whether you’re an employer or an employee, understanding these changes will help you navigate the evolving world of work more effectively.
If we can help with any aspect of your people strategy, please do get in touch on 01904 769142.