2025: The 'Get Ready' Year – Navigating Change and the Impact of Employment Law Shifts

As we are well on our journey into 2025, it is evident to me to see this as a "get ready" year – a time for businesses and individuals to prepare for the changes on the horizon. 2025 certainly feels like the calm before the storm when it comes to UK employment law.?

With ongoing consultations on employment rights, pay transparency, and workplace protections, businesses need to start thinking ahead. Let’s break down what’s coming and why now is the time to prepare.?

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A More Expensive Workforce – Higher Wages & Employer Costs?

The cost of employing people is going up again. From April 2025, both wages and employer contributions will rise:?

National Minimum Wage & National Living Wage increases:?

• 21 and over: ￡12.21 per hour (up from ￡11.44).?

• 18 to 20: ￡10.00 per hour (up from ￡8.60).?

• Under 18 & apprentices: ￡7.55 per hour (up from ￡6.40).?

Employer National Insurance Contributions (NICs) rise:?

• The rate goes from 13.8% to 15%.?

• The threshold for paying NICs drops from ￡9,100 to ￡5,000, meaning employers will pay more for lower earners.?

• There is some relief for smaller businesses: Employment Allowance increases from ￡5,000 to ￡10,500.?

What does this mean??

For businesses with tight margins, this could trigger pay reviews, pricing adjustments, or workforce planning decisions. With costs rising, many companies will need to rethink hiring strategies and efficiency measures. With 97.7% of UK businesses (2 or more employees) being under 50 employees, this is likely to have a significant impact. So, what appears to be more money in pockets for the working population, may actually mean less job opportunities.?

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Employment Rights: The Big Conversations of 2025?

Several key employment rights reforms are under consultation this year. While nothing is set in stone yet, we could see major shifts in 2026.?

Unfair Dismissal from Day One??

Currently, employees need two years’ service before they can claim unfair dismissal. A proposed change would give day-one protection.?

Zero-Hours Contracts Under Scrutiny?

Workers may gain the right to request stable hours, reducing reliance on unpredictable schedules.?

Flexible Working by Default?

Rather than requesting it, flexible working could become a default right from day one. Employers would need to justify why it can’t work, rather than why it can.?

‘Fire and Rehire’ Restrictions?

Some businesses use this tactic to force contract changes. New rules may limit or ban the practice.?

What does this mean??

If these changes go ahead, employers will need to rethink how and who they hire, contract terms, and dismissal procedures. Flexibility will no longer be a perk; it will be an expectation. It is hard to say exactly what these changes mean for businesses (small or large), but it is important to stay on top of the progress of these discussions as they develop. Nuances or changes in approach to what we know of now can require some significant shifts in the way we operate.?

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The Right to Switch Off – Could the UK Follow France??

The ‘Right to Disconnect’, a law in France since 2017, might soon be introduced in the UK. As part of the consultations mentioned above, this change would give employees the right to ignore work communications outside of working hours (except in emergencies). So, anything such as emails, texts or calls, employers will no longer be able to contact employees or expect them to respond.?

Will it happen??

We don’t know yet, but it’s being discussed as part of wider employment rights reforms. But if this comes into force, businesses may need clearer policies on out-of-hours expectations, especially in remote and global teams.?

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Equality & Pay Transparency – A Step Beyond Gender Pay Gap Reporting?

Big businesses (250+ employees) may soon need to publish ethnicity and disability pay gaps, similar to the current gender pay gap reporting rules. Expected in 2025, but likely implemented in 2026, this could bring greater accountability and push more companies towards inclusive pay practices.?

What does this mean??

If you’re a smaller business, this won’t impact you yet - but with the push for greater pay transparency, expect more conversations about fair pay and equity. For businesses over 250 employees, it is worth getting ahead of the curve now as it might take some time to make sure you have clean data that is necessary and that you are ready to act. This process can be time consuming, and we may not have much lead time to get it in place.?

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Family & Carer Leave – More Protections in Place?

Some family-friendly policies already came into effect in April 2024, while others are due in 2025:?

Maternity & Redundancy Protections Extended?

Pregnant employees and those on maternity/adoption/shared parental leave are protected from redundancy for 18 months after childbirth.?

Neonatal Care Leave (April 2025)?

Parents of babies in neonatal care will get up to 12 weeks of paid leave - on top of existing parental leave.?

Carer’s Leave (Post-April 2024)?

Employees who care for someone with long-term needs will be entitled to one week of unpaid leave per year.?

What does this mean??

If you haven’t already you should review your family-friendly policies to ensure they support retention and employee wellbeing. While some of these came into play last year, we’re likely to see more of an impact this year.?

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Statutory Pay Increases – Small but Significant?

From April 2025:?

• Maternity, paternity, adoption, and bereavement pay increases to ￡187.18 per week.?

• Statutory Sick Pay (SSP) rises to ￡118.75 per week.?

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Sexual Harassment Protections – The Law Has Already Changed?

From October 2024, UK companies became responsible for preventing sexual harassment by third parties (e.g. customers, suppliers, clients).?

If your workplace policies haven’t been updated yet, this should be a priority.?

As this came into force late last year, we’re likely to still be seeing the implications of the changes. This is one to watch for the year ahead!?

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So, Is 2025 the Year of Change??

Not quite, but it’s the year to prepare.?

While some big shifts are happening now, 2025 feels like the ‘get ready’ year. Many of the biggest employment law changes are still in consultation and will likely take effect in 2026. As we start to understand more about what is coming next year, you may have to start putting the foundations in place throughout this year.?

What should businesses do now??

• Review pay structures to prepare for wage increases.?

• Check National Insurance cost implications on workforce budgets.?

• Audit policies for flexible working and family leave to ensure compliance.?

• Start tracking pay equity data, especially if you’re a larger employer.?

• Get ahead of potential employment law shifts, especially around contracts, dismissals, and zero-hours arrangements.

Are you ready for these changes? What challenges do you see coming? Feel free to add your comments.?

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