As 2025 unfolds, significant updates to UK employment law are reshaping the responsibilities of businesses and the rights of workers. From enhanced family leave entitlements to stricter rules on dismissal practices and wage increases, these changes demand attention from HR teams, business leaders, and employers of all sizes.
New Code on “Fire and Rehire” (Effective 20 January
2025)
Employers can no longer propose contract changes through dismissal and re-engagement ("fire and rehire") without following a new statutory Code of Practice. Failure to comply could lead to employment tribunal award increases of up to 25% per case. Dismissal and rehire - Changes to your contract - Acas
Key actions:
- Engage in meaningful consultation with affected employees and unions.
- Document the whole process thoroughly to prove compliance.
Minimum Wage and National Insurance Updates (From 1 April 2025)
New Minimum Wage Rates:
- £12.21/hour for workers aged 21+
- £10.00/hour for 18–20-year-olds
- £7.55/hour for under-18s and apprentices
National Minimum Wage and National Living Wage rates - GOV.UK
National Insurance Changes:
- Employer NICs rise to 15%
- Threshold drops to £5,000
- Employment Allowance increased to £10,500
Rates and thresholds for employers 2025 to 2026 - GOV.UK
Key actions:
- Update payroll systems immediately.
- Communicate changes to your finance and HR teams.
Statutory Pay Increases (From 6 April 2025)
Weekly rates rise to:
- Sick Pay (SSP): £118.75
- Maternity, Paternity, Adoption, Shared Parental & Bereavement Pay: £187.18 or 90% of average earnings
Additionally, expect updates to caps on redundancy pay and tribunal awards.
Key actions:
- Adjust your payroll and family leave policies.
- Ensure accurate calculations for all statutory entitlements.
Neonatal Leave & Pay (Effective 6 April 2025)
A new right for parents whose baby needs neonatal care: up to 12 weeks of paid leave, available from day one of employment if the child spends at least seven days in hospital.
- Paid at £187.18/week (or 90% of earnings for eligible employees)
Statutory Neonatal Care Pay and Leave: employer guide: Overview - GOV.UK
Key actions:
- Create or update neonatal leave policies.
- Educate line managers on eligibility and support procedures.
Bereavement-Related Paternity Leave (Regulations Pending 2025)
Bereaved partner will have the right from day one to take two weeks of leave within a 56-week period, regardless of length of service. Draft regulations are expected to be issued later in 2025. Statutory Parental Bereavement Pay and Leave: Overview - GOV.UK
Key actions:
- Stay informed as regulations develop.
- Prepare to amend existing paternity leave policies accordingly.
Employment Rights Bill: Broader Reforms Ahead
(Implementation from Late 2025 Onwards)
The government’s Employment Rights Bill will deliver far-reaching changes, including:
- Unfair dismissal protection from day one
- Enhanced rights to request flexible working(also from day one)
- Rights for zero-hours workers to request predictable contracts
- New anti-harassment obligations for employers July 2025 Roadmap for the Employment Rights Bill | Legal Vision UK
- Updated rules for collective redundancy consultation
- SSP reforms : removal of earnings threshold and day-one eligibility
Implementing the Employment Rights Bill - Our roadmap for delivering change
Key actions:
- Review contract types and working practices.
- Prepare for proactive employee-rights enforcement.
Fair Work Agency Powers (From Late 2025)
A newly established Fair Work Agency will oversee the enforcement of employment rights. Inspectors will have wide-ranging powers, including the authority to enter business premises and request
Corporate Duty to Prevent Fraud (Effective 1 September
2025)
Large employers must take “reasonable steps” to prevent fraud by employees, contractors, or agents—or risk criminal prosecution.
Applies to businesses with:
- £36M+ turnover, or
- £18M+ in assets, or
- 250+ employees
Key actions:
- Update anti-fraud policies and training programs.
- Assign internal responsibility for managing fraud risk.
Final Thoughts: Stay Compliant, Stay Ahead
The 2025 legal updates reflect a broader shift towards fairness, flexibility, and accountability in the UK workplace. Employers who invest in early compliance will avoid penalties, enhance employee trust, and demonstrate a commitment to responsible business practices.
If you haven’t already, now is the time to:
- Audit employment contracts and policies
- Train HR and management on the new rules
- Consult legal experts where needed