Employment Law Update

April 2025 brings several key employment law changes that could impact your business. To help you stay compliant, we’ve summarised the key updates below, including changes to wages, National Insurance, and employee rights.

New minimum/living wage rates

From 1^st April 2025, the National Minimum Wage and National Living Wage will increase as follows:

Category	New Rate
National Living Wage (Age 21+)	£12.21 per hour
National Minimum Wage (Age 18–20)	£10.00 per hour
National Minimum Wage (Age 16–17 and Apprentices)	£7.55 per hour

This increase means businesses will need to budget for higher wage costs, particularly in sectors with a high proportion of lower-paid employees, such as hospitality and retail.

From 6^th April 2025, other statutory rates will also increase as follows:

Category	New Rate
Statutory Sick Pay (SSP)	£118.75 per week
Statutory Maternity Pay (SMP), Paternity Pay (SPP), Adoption Pay (SAP), Shared Parental Pay (ShPP), Parental Bereavement Pay (PBP), and Neonatal Care Pay (NCP)	£187.18 per week
Lower Earnings Limit	£125 per week

Employer National Insurance increases – What you need to know

From 6^th April 2025, the following changes to employer National Insurance Contributions (NICs) will take effect:

Category	Current Rate (2024–2025)	New Rate (2025–2026)
Secondary Threshold (Earnings level above which employers pay NICs)	£9,100 per year	£5,000 per year
Employer NICs Rate (Secondary Class 1 rate)	13.80%	15%
Employment Allowance (Relief for eligible employers)	£5,000	£10,500

In summary:

Secondary Threshold Reduction – Employers will start paying NICs at a lower earnings level.
Rate Increase – Employer NICs contribution will rise.
Employment Allowance Increase – Small businesses will benefit from additional NICs relief, helping to offset cost.

New Right for Parents: Neonatal Care Leave

The Neonatal Care (Pay and Leave) Act takes effect from 6^th April 2025 and introduces new rights for parents of premature or sick babies. Eligible employees will gain additional rights to take up to 12 weeks paid neonatal care leave (NCL), in addition to their other leave entitlements such as maternity and paternity leave. This will be a day 1 right to help support parents of babies who are admitted into neonatal care for at least seven continuous days within 28 days of birth. This is designed to ease the burden on working parents facing unexpected and prolonged hospital stays for their newborns.

How to Prepare for these Changes

To prepare for these reforms, it’s essential to take proactive steps:

Review and update contracts, policies, and procedures to meet new requirements.
Plan for increased payroll costs, NICs contributions and administrative changes.
Train your HR teams and management to understand and implement the updates smoothly.

If you haven’t already, check out our February blog on forthcoming employment law changes for additional context on what’s coming next.

Navigating employment law changes can be complex, but we’re here to help. Please be assured that we’re here to assist with tailored advice and updates to your Handbook, Policy and other documents, to minimise the impact on your business.

Sources:

CIPD Employment Law Updates