National Minimum & Living wages

One of the most immediate changes will be the increase in the National Minimum Wage and the National Living Wage. From 1st April 2025, workers aged 21 and over will see their hourly rate rise to £12.21 from the current £11.44.

Change: 

•  21 and over: increase from £11.44 to £12.21 per hour
• 18 to 20-year-olds: increase from £8.60 to £10.00 per hour
• 16 to 17-year-olds and apprentices: increase from £6.40 to £7.55 per hour

Effective from: 1st April 2025

Daniel on Legal Implications: 

“Failure to comply with the National Minimum Wage and National Living Wage regulations can have significant legal and financial repercussions for businesses. HMRC can issue substantial fines of up to 200% of the underpayment, with a maximum of £20,000 per affected worker. Businesses will also be required to pay back the owed wages to their employees. 

“It’s not only financial damage that businesses could face but also reputational. The government may “name and shame” non-compliant businesses by publishing their details. Employees can also take legal action through employment tribunals, potentially claiming for unpaid wages.”

Statutory Sick Pay  

Statutory Sick Pay (SSP) will also see an increase, rising to £118.75 per week. The lower earnings threshold to qualify for SSP will also rise to £125.00 per week. This adjustment is designed to offer greater financial support for those unable to work due to illness. 

Change: Increase from £116.75 to £118.75 per week

Effective from: April 2025

Daniel on Legal Implications:

“It’s crucial for employers to be thorough and clear in updating their HR policies and ensuring that employees are aware of their entitlements. Failure to comply with Statutory Sick Pay (SSP) regulations can expose businesses to multiple legal liabilities. 

“For instance, HMRC can impose financial penalties for incorrect SSP payments or failure to pay SSP when legally required.  If employees are underpaid statutory sick pay, businesses may be required to repay the full amount they were entitled to receive. Employees are also legally allowed to bring claims to an employment tribunal if they believe they’ve been wrongly denied SSP – which can result in compensation and legal costs for the employer. 

“It’s important that businesses are aware of these changes and that they are implemented and planned ahead of April as if they fail to pay SSP as required, it could be considered a breach of the implied terms of an employment contract and can lead to a civil court case.”

Employer National Insurance

From April, the employer NI rate will rise by 1.2 per cent to 15%, increasing payroll costs across the board. This will add another layer of financial responsibility for businesses. The lowering of the secondary threshold – from £9,100 to £5,000 per year – means employers will need to pay National Insurance on a greater portion of employee wages.

Change: Rate will increase by 1.2% to 15%

Effective from: April 2025

Daniel on Legal Implications: 

“Businesses should carefully assess their staffing budgets and ensure their payroll systems are updated to account for these changes. The legal requirements for employers regarding the NI rate increase are primarily centered around accurate calculation and timely payment of contributions. Failure to comply can result in significant legal challenges. 

“HMRC can impose penalties for late or underpayment of NI contributions. The severity of the penalty will depend on the amount of underpayment and the duration of the non-compliance. These penalties can include interest charges on the outstanding amount. They can also conduct investigations and audits of a business’s payroll records to ensure compliance. Employers will need to provide access to payroll records and other relevant documentation. These investigations can be time-consuming and disruptive.

“In cases of deliberate and fraudulent non-compliance, such as intentionally underreporting earnings, criminal prosecution may occur. This can result in fines or imprisonment. In some cases, particularly with smaller companies or where there’s evidence of deliberate evasion, directors may be held personally liable for unpaid NI contributions.

“While the primary issue is the employer’s NI contributions, if the employer incorrectly deducts NI from the employee, this could lead to unlawful deduction claims. Failure to correctly calculate and apply NI can, in some circumstances, be argued as a breach of the implied terms of an employment contract and be a tribunal claim.”

Family Law 

New Neonatal Care Leave

From 6 April, eligible employees will have the right to 12 weeks of neonatal care leave and a minimum statutory pay of £187.18 per week, in addition to existing family-related leave entitlements, including maternity, paternity, adoption, and shared parental leave. This policy will be available from the first day of employment, removing barriers for new hires needing urgent support.

Aim: Eligible employees will have the right to 12 weeks of neonatal care leave and statutory pay.

Effective from: April 2025

Daniel on Legal Implications: 

“Employers must update their family leave policies and incorporate the new neonatal care leave policy. Not complying with Neonatal Care Leave regulations can expose businesses to significant legal penalties. Employees can bring claims to an employment tribunal if they believe they have been wrongly denied Neonatal Care Leave or statutory pay. This can lead to employees paying for financial losses and distress if relevant. 

“If employers are found to provide incorrect payments or fail to pay statutory Neonatal Care Leave pay to their employees, HMRC can impose financial penalties. They can also reclaim any overpaid statutory pay. If the company offers enhanced neonatal care leave pay, failing to pay this correctly, can be a breach of contract and can lead to a civil court case for the business.”

Parental leave pay

From April, parents receiving statutory maternity pay, paternity pay, adoption pay, shared parental pay, or parental bereavement pay will benefit from an increase to £187.18 per week. This adjustment provides slightly greater financial support to parents during their leave period.

Change: Eligible employees will receive an increased amount of £187.18 per week

Effective from: April 2025

Daniel on Legal Implications:

“Businesses must be aware of the increase in parental leave pay policies. Employers should review their payroll processes to ensure compliance with these new thresholds and pay rates. Failure to do so can lead to several legal consequences for employers. Incorrect payments, late payments or failure to pay parental leave pay can trigger HMRC to impose penalties, and lead to employers repaying any underpaid amounts.

“Employees can bring claims to an employment tribunal for unpaid or incorrectly paid parental leave pay. Breach of employment rights or even if the non-compliance is based on discriminatory grounds, can also be tribunal claims. This can result in significant financial penalties as well as reputational damage for the employer.

“In cases where contractual parental leave pay is involved, failure to pay can be considered a breach of contract, leading to civil court action. Employees can also pursue legal action through civil courts to recover unpaid parental leave pay as a debt.”

Immigration Changes

Skilled Worker Visa 

For businesses reliant on overseas talent, the Skilled Worker visa changes are particularly noteworthy. From 9th April 2025, the general salary threshold for this visa route will increase to £25,000 per year.

Change: Salary threshold to increase from £23,200 to £25,000 per year

Effective from: 9th April

Daniel on Legal Implications: 

“It’s crucial for businesses to maintain strict compliance with Skilled Worker visa regulations to avoid potentially severe consequences. Non-compliance with updated immigration requirements may result in the following. The Home Office can revoke a business’s sponsorship license, preventing them from sponsoring any further overseas workers. Businesses can face substantial civil penalties for breaches of sponsorship duties, such as failing to report changes in an employee’s circumstances or paying below the required salary threshold.

In severe cases, such as knowingly employing an illegal worker or providing false information to the Home Office, businesses and their directors can face criminal prosecution. The Home Office can conduct inspections and audits of businesses to ensure compliance, and can take enforcement action if breaches are found. In some cases, the company may be prohibited from sponsoring any further workers for a set period of time. Employees may take legal action against the company if they believe their employee is not meeting the new salary threshold and is being underpaid.”