2025 is set to bring significant updates and reforms to employment law that will shape the way businesses operate and how employees navigate their rights. In this week’s HR article, we explore the key legislative updates for 2025 that will impact both employers and employees.

The Employments Rights Bill – Make Work Pay

The Bill is progressing through the parliamentary stages and is expected to change several aspects of employment law. The Make Work Pay proposals are laid out in the bill and will be delivered through amendments to codes, legislation and consultations.

We will keep FPM members updated on the progress of the bill through a series of articles released in the fortnightly bulletin.

(Click here to sign up for this bulletin).

Paternity Leave (Bereavement) Act 2024

This act allows fathers and partners to take paternity leave upon the death of the birth mother, or death of the person with whom the child is placed for adoption, and intends to remove the qualifying period for this leave.

The bill received Royal Assent in May 2024 and secondary legislation is currently progressing to clarify the rights and provisions of the act. When this is finalised, we expect to see confirmation on when this this right will be in place for employees.

Benefits Rates for 2025/2026

Statutory Maternity pay, Maternity Allowance, Statutory Adoption pay, Statutory Paternity pay, Statutory Shared Parental pay and Statutory Parental Bereavement pay will increase to £187.18.

The lower earnings limit will increase to £125 weekly.

National Insurance Contributions rate for 2025 – 2026

National Insurance rates alter to:

·         Paid by employers (Secondary Class 1 contributions) – an additional 15% per employee on top of gross salary (increase from 13.8%). Employers will pay per employee when they earn £5,000+ annually.

·         Paid by employees (Class 1 primary contributions) – 8% reduced from 10%.

National Minimum and Living Wage Rates for 2025-2026

·         The National Living Wage for over 21s rises from £11.44 to £12.21 per hour

·         The National Living Wage for 18 to 20 year olds rises from £8.60 to £10 per hour

·         The real Living Wage rises to £12.60 per hour outside of London and £13.85 per hour in London.

Employment tribunal reforms - Legally enforceable

New tribunal rules and guidance on the presentation of claims and responses have come into effect. The changes mean tribunal responses must be submitted online, or by post or by hand (removing email as a possibility). Both claims and responses must now only be submitted via these methods. 

Biometric Residence Permits

The UK Government ceased issuing Biometric Resident Permits on 31 October 2024. Most permits expired on 31 December 2024 and the Home Office is replacing these permits with online eVisas.

Businesses should ensure that employees have now applied for, or have had granted, an eVisa (where required). Where employees have lost the physical record of their immigration status, the status itself is not lost, however the process becomes more complicated and may impact right to work checks.

Next Steps

Employers should begin to prepare for the changes which are coming into force in 2025. It is advisable to keep track of how the proposals under the Employment Rights Bill unfold as there will be many moving parts to this.

Organisations should start reviewing and updating their policies, procedures, practices and contracts of employment.

Taking proactive steps early on will ensure a smoother transition when the proposals do eventually become law.

FPM Core is our market-leading compliance software for managing healthcare policies and procedures. Contact Peter Hobden or call 07880 200411 to book your demo today.