Employment Law Changes 2025 UK: What Employers Need to Know

As we move through 2025, significant employment law changes are taking shape across the UK. These reforms—some already in force and others on the horizon—will impact how businesses recruit, manage, and retain staff. At EBS Law, we’re here to help employers navigate these updates with confidence and clarity.

Key Employment Law Changes 2025 UK: An Overview

From wage increases to expanded employee rights, the employment law landscape is evolving. Below, we outline the most critical developments that UK employers should be aware of in 2025.

1. National Minimum and Living Wage Increases

Effective from 1 April 2025, the following wage rates apply:

National Living Wage (21+): £12.21 per hour (up from £11.44)
18–20 Year Old Rate: £10.00 per hour (up from £8.60)
16–17 Year Old and Apprentice Rate: £7.55 per hour (up from £6.40)

These increases aim to address the cost-of-living crisis and move towards a unified adult rate over time. Employers should review their payroll systems to ensure compliance. Source

2. Employer National Insurance Contributions (NICs)

From April 2025, employer NICs rose from 13.8% to 15% for salaries above £5,000. Additionally, the threshold at which employers started paying NICs will decreased from £9,100 to £5,000. To support smaller businesses, the Employment Allowance will increase from £5,000 to £10,500. Source

3. Statutory Pay Rate Adjustments

Starting April 2025:

Statutory Sick Pay (SSP): £118.75 per week (up from £116.75)
Maternity, Paternity, Adoption, Shared Parental, and Bereavement Pay: £187.18 per week (up from £184.03)

Employers should update their policies and payroll systems accordingly. Source

Upcoming Employment Law Changes 2025 UK: Preparing for 2026

While some reforms are already in place, others are set to come into effect in 2026. Employers should begin preparations now to ensure a smooth transition.

4. Employment Rights Bill: Day-One Unfair Dismissal Protection

The forthcoming Employment Rights Bill will remove the two-year qualifying period for ordinary unfair dismissal claims, granting employees protection from their first day of employment. This change necessitates a review of dismissal procedures and probationary policies. Source

5. Ban on Zero-Hours Contracts

Legislation will require employers to offer contracts reflecting the actual hours worked by employees, including agency workers. Compensation will be mandated for shifts cancelled at short notice. Employers relying on flexible staffing models should assess and adjust their contractual arrangements. Source

6. Flexible Working Requests from Day One

From spring 2025, employees will have the right to request flexible working arrangements from their first day of employment. Employers must respond to such requests within two months and consult with employees before any refusal. Source

7. Proactive Measures Against Workplace Harassment

The Worker Protection (Amendment of Equality Act 2010) Act 2023, effective from 26 October 2024, imposes a duty on employers to take reasonable steps to prevent sexual harassment in the workplace. Employers should implement comprehensive training and clear policies to foster a safe working environment. Source

Additional Employment Law Changes 2025 UK to Consider

8. Allocation of Tips

Under the Employment (Allocation of Tips) Act 2023, effective from 1 October 2024, employers must ensure that tips, gratuities, and service charges are allocated fairly to workers. This applies to agency workers as well. Employers should review their tipping policies to ensure compliance. Source

9. Employment Tribunal Reforms

New Employment Tribunal Procedure Rules came into effect on 6 January 2025. Employers must now submit the response Form ET3 online, by post, or by hand, as email submissions are no longer accepted except in exceptional circumstances. Source

If you would like advice on how these employment law changes in 2025 UK affect your business, John Bloor and the team at EBS Law are here to help. Call John today on 01625 874400 or email enquiries@ebslaw.co.uk.

Preparing Your Business for Employment Law Changes 2025 UK

To ensure compliance and mitigate risks associated with these changes, employers should:

Review and update employment contracts and policies
Train HR personnel and management on new legal obligations
Assess the financial impact of wage and NIC increases
Implement systems to manage flexible working requests effectively
Establish clear procedures for handling grievances and disciplinary actions

Proactive planning and consultation with legal experts can help businesses adapt smoothly to the evolving employment landscape.

Contact John Bloor today for expert support at EBS Law. Whether you need assistance with policy updates, training, or compliance audits, we’re here to guide you through the employment law changes in 2025 UK. Call 01625 874400 or email enquiries@ebslaw.co.uk.