From April 2025, several employment law changes take effect, some of which are already in force. Employers should take steps to ensure compliance.
National Minimum Wage and National Living Wage
Changes to the National Minimum Wage (NMW) and National Living Wage (NLW) took effect on 1 April 2025. A significant change is the extension of the NLW to workers aged 21 and over, previously applied to those 23 and over.
The new hourly rates are:
- Age 21 or over - £12.21
- Age 18-20 - £10.00
- Age 16-17 and Apprentices - £7.55
- Accommodation Offset (daily) - £10.66
National Insurance Contributions
On 6 April 2025, the national insurance rate paid by employers will increase from 13.8% to 15%. The annual threshold triggering employer National Insurance payments will be lowered from £9,100 to £5,000.
The Employment Allowance will be raised from £5,000 to £10,500.
Statutory Rate Changes
From 6 April 2025, the following weekly statutory rates will increase:
- Statutory Sick Pay - £118.75. The lower earnings limit will increase to £125
- Statutory Maternity, Adoption, Paternity, Shared Parental and Parental Bereavement Leave Pay - £187.18
Neonatal Leave and Pay – Neonatal Care (Leave and Pay) Act 2023
From 6 April 2025, eligible employees will be entitled to statutory neonatal care leave and pay in addition to maternity and paternity leave rights. Eligible employees will be able to take up to 12 weeks of leave and will receive £187.18 per week in Neonatal Statutory Pay.
Statutory Awards and Payments
For employment terminations on or after 6 April 2025:
- A “week’s pay” - the figure used to calculate statutory redundancy pay - will rise to £719
- Unfair dismissal compensatory awards - the maximum limit will increase to £118,223
From 6 April 2025, the Vento bands will be increased as follows:
- Lower band - £1,200 to £12,100
- Middle band - £12,100 to £36,400
- Upper band - £36,400 to £60,700
What’s next?
Employers must implement these changes, particularly those affecting NMW/NLW increases. The new definition of “week’s pay” is also a crucial change for redundancy exercises.
We recommend the following steps:
- Implement relevant payroll action.
- Update policies and review employment contracts.
- Review pension contributions which may need to be updated.
- Review the affected employees to see whether they will now fall within the scope of pension automatic enrolment, maternity pay, etc.
- Communicate any changes to employees.
How can Tozers help?
Tozers can assist you in navigating these changes smoothly. Our team of experts is well-versed in employment law and can provide tailored advice to ensure compliance with the new regulations. Contact us today.
