As of April 2025, several changes in employment law have taken effect, including the annual increases in statutory pay rates. Effective from 1st April 2025, the National Minimum Wage for those aged between 18 to 20 will increase from £8.60 to £10.00 per hour, and National Living Wage for those aged 21 and over will rise from £11.44 to £12.21 per hour. In addition, from 6th April 2025, Statutory Sick Pay will increase from £116.75 to £118.75 per week, and the lower earnings threshold to qualify for the same will rise to £125.00.
In addition to the increases to statutory rates of pay, there have also been increases in the statutory limits and awards for employment tribunals. The Employment Rights (Increase of Limits) Order 2025 increases the compensation limits that apply to certain awards made by an employment tribunal. For instance, the maximum amount of a ‘week’s pay’ used to calculate statutory redundancy pay and the basic award for unfair dismissal, among other awards, increases from £700.00 to £719.00. Consequently, the maximum statutory redundancy pay increases from £21,000.00 to £21,750.00, as does the maximum basic award for unfair dismissal.
Compensation in unfair dismissal cases is made up of a basic award, as referenced above, and a compensatory award. The Employment Rights (Increase of Limits) Order 2025 has not only increased the basic award for unfair dismissal, but also the maximum compensatory award available, which has increased from £115,115.00 to £118,223.00. It is important to note, however, that, in successful unfair dismissal claims, employees will still only receive the lower of a year’s salary or the maximum statutory limit (i.e. £118,223.00). These changes apply to terminations of employment taking effect from 6 April 2025.
The Neonatal Care (Leave and Pay) Act 2023 introduces a new type of statutory leave and pay for parents whose babies require neonatal care. As of April 2025, employees will be entitled to neonatal care leave and pay from the first day of employment, in addition to their existing maternity, paternity or shared-parental entitlements. This will be available to employees whose babies receive neonatal care for at least 7 consecutive days within the first 28 days of birth, and will enable eligible employees to take 1 week of leave for each week their child is in care, for up to a maximum of 12 weeks, and receive a maximum pay of £187.18 per week. The leave can be taken at any time within the first 68 weeks of the baby’s birth. In addition, from the 6th April 2025, the statutory rates of maternity, paternity, adoption, shared-parental and parental bereavement pay will increase from £184.03 to £187.18 per week. As with Statutory Sick Pay, the minimum earning threshold to qualify for these payments has increased from £123.00 per week to £125.00 per week.
If you require any advice or assistance in relation to employment law matters, please do not hesitate to contact a member of our Employment Law team who can assist with all enquiries.
