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Employment Law Changes Every Employer Should Know

As we step into 2025, several important employment law updates and statutory changes are on the horizon. From new pay rates to family leave entitlements and compliance penalties, here’s what UK employers need to be aware of over the coming months.


January 2025: Collective Consultation Penalties Strengthened

Employers using dismissal and re-engagement to change terms for 20 or more employees must take note.

From 20 January 2025, the 25% compensation uplift for failing to comply with the statutory Code of Practice on Dismissal and Re-engagement will now apply to protective awards.

This means that if an employer fails to consult collectively and doesn’t follow the Code, affected employees could receive up to 90 days’ pay, plus an additional 25% uplift as ordered by an employment tribunal.

Employers with a January–March leave year may also begin using rolled-up holiday pay for part-year or irregular hours workers, following regulatory changes introduced in 2024.


April 2025: New Statutory Pay Rates & Family Rights

April brings the usual changes to statutory pay rates, with increases across the board:

  • National Living Wage (21+): £12.21

  • Ages 18–20: £10.00

  • Ages 16–17 & Apprentices: £7.55

  • Statutory Sick Pay: £118.75/week

  • Statutory Maternity Pay, Paternity Pay, and other family-related leave pay: £187.18/week

  • Lower Earnings Limit: £125/week


New Family Leave: Neonatal Care Leave

Subject to final parliamentary approval, neonatal care leave and pay are expected to take effect in April. This new right will provide parents whose babies require hospital neonatal care with protected leave and financial support.


May 2025: Real Living Wage Deadline

While not a statutory requirement, employers accredited by the Living Wage Foundation must increase pay by 1 May to maintain their status:

  • UK rate: £12.60

  • London rate: £13.85

Employers not accredited may still choose to align with these voluntary rates as part of their recruitment and retention strategy.


Other Reforms Expected in 2025

Paternity (Bereavement) Leave

A new right to paternity bereavement leave is expected to be introduced in 2025. This will give fathers or non-birthing partners access to extended leave if a mother or adoptive parent dies, potentially for up to 52 weeks, mirroring current maternity leave provisions.

Changes to Child Employment Rules

If passed, the Children’s Wellbeing and Schools Bill will update legislation around the employment of children, including:

  • Tighter rules on working hours

  • A requirement for all employers to hold a permit to employ children


Looking Ahead: 2026 and Beyond

The Employment Rights Bill is expected to progress further during 2025, with major reforms likely to follow in 2026. While exact provisions are yet to be confirmed, we anticipate changes to flexibility, family leave, and employee protections.

Employers, Are You Ready for the Employment Rights Bill? 

Big changes are coming! The Employment Rights Bill 2024 introduces new worker protections, including updates to dismissal rules, flexible working, and parental benefits.

What Employers Need to Know:
✅ Key changes & new employer responsibilities
✅ How these reforms impact your business
✅ Compliance strategies to stay ahead

Navigating these changes isn’t just challenging—it’s an ongoing battle. Without the right tools, you risk getting lost in a sea of legal jargon, endlessly sifting through clauses and amendments, struggling to piece it all together.

Stay informed, stay compliant, and stay ahead.

Please do have a read of our Employer Guide for everything you need to know! 

Click on the link below;

https://gamma.app/docs/Introduction-to-the-Employments-Right-Bill-2024-pdf-4vjqre2n8ue160c


What Employers Should Do Now

  • Review contracts and collective consultation procedures

  • Update payroll systems in advance of April changes

  • Begin planning for potential neonatal and paternity bereavement leave

  • Consider reviewing your volunteer, part-year, and young worker policies

  • Ensure managers are trained on updated codes and consultation duties

Need help?

Need help staying compliant? Our team at Craven Consultancy Services is here to support you. Get in touch for tailored advice, training, or a review of your HR and H&S procedures.

Let us guide you in the right direction for your Health & Safety, HR and training needs.

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