January 20, 2025

UK Employment Law Changes in 2025: What you Need to Know

This post was written by: Riya Sekhon

In 2025, the UK is set to carry out significant changes in Employment Law, aiming to enhance workers’ rights. These changes are designed to address modern challenges in Employment Law, enhance financial support for workers, and promote fairness and equality. Here’s a summary of the key changes taking effect this year:

1. Neonatal Care (Leave and Pay) Act 2023

Starting April 2025, new parents whose babes require neonatal care will be entitled to additional statutory leave. Leave will be available from the first day of employment, but to qualify for paid leave, employees must have 26 weeks of constant service and meet a minimum weekly earnings threshold (£123). This law provides crucial support for families during challenging times, aligning workplace policies with modern parental needs.

2. National Minimum Wage Increases

From April 2025, the National Minimum Wage will rise, providing a boost to workers’ earnings:

  • The National Living Wage will increase from £11.44 to £12.21
  • 18–20-year-olds wages will increase from £8.60 to £10
  • Under 18’s and apprentices wages will increase from £6.40 to £7.55

Employers must review their pay structures to comply with these changes.

3. Changes to National Insurance Contributions

  • Employers NIC rates rise from 13.8% to 15%
  • Secondary Threshold for contributions will be reduced from £9,100 to £5,000
  • Employment Allowances will also increase from £5,000 to £10,500 annually, to ease the stress on small businesses

These adjustments aim to balance fiscal needs with support for small and medium enterprises (SME).

4. Employment (Allocation of Tips) Act 2023

Although this act came into full effect in October 2024, its impact continues in 2025, ensuring that all tips are passed on fully to employees and distributed in a fair, ethical way.

  • Businesses where tips are left on a regular basis must have a tipping policy in place
  • Workers are entitled to request a copy of their tipping record to support a claim in an employment tribunal if they believe they have not received the tips they are due
  • Employers must have regard to the new statutory Code of Practice when allocating tips

The Employment Law changes in 2025 emphasise worker protection and financial support while placing new compliance responsibilities on employers. Businesses should take proactive steps to update policies, payroll systems, and training to adapt to the new regulations. For employees, these changes mean stronger rights and better conditions, reflecting a broader push towards fairer workplaces.

If you need any assistance or advice, don’t hesitate to contact our Employment Solicitor Ilinca Mardarescu on imardarescu@astonbond.co.uk, or call our office on 01753 486 777.