Key Changes in Employment Law for 2025 and Beyond

Many significant updates to employment law are set to take effect as we move into 2025.

The National Minimum Wage, family-friendly payments, sick pay, redundancy payments, and employment tribunal claims are areas that will be impacted. Here’s a quick look at what’s changing:

National Minimum Wage (NMW)

NMW rates will increase significantly over the next few years:

• From April 2025, the National Living Wage will rise to £12.21 per hour for workers aged 21 and over.
• Development rates for 18-20-year-olds will up to £10.00 per hour.
• Young workers (16-17) and apprentices will earn £7.55 per hour.
• These increases will have a notable effect on employees’ wages, with the average rise for 2025 estimated at 13.67%.

Family-Friendly Payments

Family-related payments are also set to rise:

• Statutory shared parental pay, maternity pay, and paternity pay will increase to £187.18 per week in 2025.
• These payments are reviewed yearly and lead to employees recieving vital support when taking parental leave.
• Statutory Sick Pay (SSP)
• From April 2025, SSP is raising to £118.75 per week, up from £116.75 in 2024.
• The Lower Earnings Limit (LEL) for eligibility is increasing to £125 per week.

Redundancy Payments

Age and length of service is used to determine redundancy payments:

• Employees under 22 receive half a week’s pay for each year of service.
• Employees 22 - 40 receive one week’s pay, and employees aged 41 and over get one and a half weeks’ pay.
• The maximum statutory redundancy payment will be £21,000.

Employment Tribunal Claims and Compensation

Several key tribunal changes are expected:

• The time limits for claims like unfair dismissal and discrimination will likely increase to 6 months by 2026.
• Compensation limits for unfair dismissal will rise, with the maximum compensatory award reaching £115,115 in 2024.

Employment Protection and Rights

Certain rights, such as qualifying periods for Employment Tribunals against discrimination and the right to maternity leave, will remain immediate, with changes expected to extend qualifying periods in 2026.

With these upcoming changes, both employers and employees should stay up to date about the changing employment law landscape. These updates convey the growing priority of fair pay, employee protections, and family-friendly policies, which will change the future of work in the UK.