Key Employment Updates January 2025

The first half of 2025 promises significant legislative change, from increased redundancy-related penalties to enhanced family leave rights. Employers should proactively review policies, assess financial impacts, and prepare to implement these changes. Early planning will help organisations manage risks and maintain compliance in the evolving employment law landscape.

Key updates include:

January 2025

Rolled-Up Holiday Pay: Employers with annual leave years commencing between January and March can now implement rolled-up holiday pay for part-year and irregular hours workers, allowing holiday pay to be included in regular wages.

Protective Award Uplift: Effective 20 January, the 25% uplift for non-compliance with the statutory Code of Practice on Dismissal and Re-engagement will extend to protective awards. This applies when employers propose changes to employee terms via dismissal and re-engagement affecting 20 or more employees, necessitating collective consultation. Failure to comply can result in a protective award of up to 90 days’ pay, with potential additional penalties for not adhering to the code.

April 2025 Statutory Rate Increases

1. National Living Wage (NLW):
   • New Rate: £12.21 per hour.
   • Applies To: Workers aged 21 and over.
2. National Minimum Wage (NMW):
   • 18–20-Year-Olds: £10.00 per hour.
   • 16–17-Year-Olds and Apprentices: £7.55 per hour.
3. Statutory Sick Pay (SSP):
   • New Rate: £118.75 per week.
4. Statutory Maternity Pay (SMP) and Other Family-Related Leave Pay:
   • New Rate: £187.18 per week.
5. Lower Earnings Limit (LEL):
   • New Threshold: £125 per week.
   • Applies To: The minimum level of weekly earnings for employees to qualify for certain statutory payments.

• Neonatal Care Leave and Pay: Expected to commence, granting employees the right to time off when a baby under their care is hospitalised for neonatal care. This provision offers additional leave beyond standard parental entitlements.

May 2025

• Real Living Wage Adjustment: Employers accredited with the Living Wage Foundation must increase pay to £12.60 in the UK and £13.85 in London by 1 May to maintain their accreditation.

Other Anticipated Reforms

• Paternity (Bereavement) Leave: A new right is anticipated to be introduced, allowing fathers or non-birthing partners to take up to 52 weeks of leave in cases where the mother or primary adopter dies. Regulations are expected to be in place for this right to take effect from April 2025.Children’s Employment Regulations: The proposed Children’s Wellbeing and Schools Bill aims to amend rules on child employment, including working hours and the requirement for employers to obtain permits for employing minors. The bill is currently under consideration.

Employment Rights Bill

The Employment Rights Bill, introduced to Parliament on 10 October 2024, represents a significant overhaul of employment legislation, aiming to modernize and enhance workers’ rights. Key provisions include:

• Ban on Exploitative Zero-Hours Contracts: The bill seeks to prohibit the use of exploitative zero-hours contracts, ensuring workers have more predictable and secure working hours.
  GOV.UK
• End to ‘Fire and Rehire’ Practices: The legislation aims to prevent employers from dismissing and rehiring employees on less favourable terms, promoting fair treatment in the workplace.
  GOV.UK
• Day-One Employment Rights: The bill introduces basic employment rights from the first day of employment, including paternity and parental leave, and protection from unfair dismissal.
  GOV.UK

While the bill has been introduced, these changes are not expected to come into force until 2026. Employers should monitor the progress of this legislation to prepare for future compliance requirements.

The Employment Rights Bill 2024, unveiled today, Labour admits workers’ rights overhaul may take two years – Craven Consultancy Services