The read
A number of key changes to employment law changes took place on 6 April 2025. These changes aim to enhance worker protections and adjust financial obligations for employers.
We've broken down what it means for business leaders and owners into simple terms:
1. Increase in National Minimum Wage Rates
The government announced substantial increases to the National Minimum Wage (NMW) rates, effective from 1 April 2025:
- National Living Wage (21 and over) – increasing from £11.44 to £12.21 per hour.
- NMW for 18-20 year olds – increased from £8.60 to £10.00 per hour.
- NMW for under 18's and apprentices – increasing from £6.40 to £7.55 per hour.
These adjustments reflect the government's commitment to improving living standards for low-paid workers.
2. Changes to Statutory Payments
Several statutory payments have increased:
- Statutory Sick Pay (SSP) – increased from £116.75 to £118.75 per week.
- Statutory Maternity Pay, Maternity allowance, Adoption Pay, Paternity Pay, Shared Parental Pay and Parental Bereavement Pay increased from £184.03 to £187.18 per week.
- Lower earnings limit for qualifying for these payments increased from £123 to £125 per week.
- Statutory cap on a week's pay used to calculate redundancy pay and the basic award in unfair dismissal increased from £700 to £719.
- Maximum statutory redundancy payment has increased from £21,000 to £21,570.
- Statutory maximum compensatory award for unfair dismissal has been increased from £115,115 to £118,223.
3. Injury to Feelings Awards for Discrimination and Whistleblowing Claims
From 6 April 2025, the Vento Band rates have increased:
- Lower Band – Increase from £1,200 – £11,700 to £1,200 – £12,100.
- Middle Band – Increase from £11,700 – £35,200 to £12,100 – £36,400.
- Upper Band – Increase from £35,200 – £58,700 to £36,400 – £60,700.
- Top Band – Increase from £58,700 plus to £60,700 plus.
4. Changes to Employers National Insurance Contributions (NICs) and Thresholds
Employers will experience changes in NICs:
- Rate increase: the employer NIC rate rose from 13.8% to 15%, a much publicised significant uplift.
- Threshold reduction: the earnings threshold for NICs liability decreased from £9,100 to £5,000 per year.
To mitigate the impact on employers, the Employment Allowance increased from £5,000 to £10,500.
5. Introduction of Neonatal Care Leave and Pay
The Neonatal Care (Leave and Pay) Act 2023 applies to parents of babies born on or after 6 April 2025.
- Provides a new statutory right for employees to take up to 12 weeks' leave when their baby requires neonatal care within 28 days of birth and at least 7 days spent in hospital.
- This is a right from day one and must be taken within 68 weeks of the baby's birth.
- Length of neonatal care will dictate the length of leave subject to 12-week cap.
- Idea is to add this to existing maternity/paternity leave to compensate for the time their baby spent in neonatal care
Parents with at least 26 weeks' continuous service and earning above the lower earnings limit will be entitled to Statutory Neonatal Care Pay, at the same rate as other statutory family pay (which is £187.18 from 6 April 2025).
The employment law changes that have taken place in April 2025 reflect the ongoing efforts to enhance worker protections and adjust employer obligations. Employers should prepare for these changes to ensure compliance and support their workforce effectively.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
