Five employment law changes to watch out for this April

Back in October 2024, Chancellor Rachel Reeves announced key updates for employers, and some of those will take effect next month. The HR Dept. has outlined the changes you should be aware of as April approaches.

One: Increase to National Minimum Wage

The National Minimum Wage rises every April. The increases this year are higher than underlying inflation, meaning you may have to carefully budget for it as the year unfolds.

For workers aged 21 and older, the National Living Wage jumps from £11.44 to £12.21 per hour – a 6.7% increase.

For those aged 18-20 the increase is from £8.60 to £10 (a 16.3% increase).

There are 18% rises for workers aged 16-17 and for the apprenticeship rate, both rising from £6.40 to £7.55.

Two: National Insurance Contributions and thresholds

This was the real headline grabber from Labour’s Budget, and will negatively impact many SME businesses, but there are some mitigations.

So the bad news first: Employer National Insurance Contributions rates will rise from 13.8% to 15%, and moreover the level at which you start paying them will drop significantly from £9,100 to £5,000.

On the plus side, you may be able to benefit from the extended employment allowance which allows some smaller employers to offset some or all NICs. This was £5,000 and is rising to £10,500. There was an NIC liability threshold of £100,000 above which you couldn’t claim this allowance. But this has been removed so even if you previously were not able to claim the employment allowance, you may now be able to.

Three: Introduction of neonatal leave and pay

From 6 April there will be a new leave for parents whose new-born requires neonatal care, thanks to the Neonatal Care Act. If a baby up to 28 days old is admitted to hospital and has a continuous stay of seven or more days, the parents will be entitled to take up to 12 weeks of leave to manage this difficult time.

This is a day one right. Statutory neonatal care pay will also be available for employees with 26 weeks’ continuous service with average weekly earnings of at least £125 per week on average.

Four: Statutory pay rate rises

As you will know, there are a number of statutory pay rates, and these typically rise each April. This year, the increases have been set at the following statutory rates:

Maternity, paternity, adoption, neonatal care, shared parental and parental bereavement pay will all increase from £184.03 to £187.18.

Sick pay will increase from £116.75 to £118.75.

Similarly, the lower earnings limit for an employee to qualify for these statutory payments will rise from £123 to £125, whilst the lower earnings limit for maternity pay will stay at £30.

Five: Updated Vento Bands for 25/26

Vento Bands are designed to give consistent awards for injury to feelings compensation decided in employment tribunals.

In the current year they are set at £1,200-£11,700 for the lower band (less serious cases), £11,700-£35,200 for the middle band and £35,200-£58,700 for the higher band.

They increase each year by an amount determined by the Presidents of the England, Wales and Scotland Employment Tribunals.

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