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Start a free trialWe recently ran a webinar for small business owners and managers on the essential employment law changes and updates for 2025.
Co-hosted by Alisa Mistry and Phoebe Harrison from Charlie Advice team and legal expert Nick Pritchett from Legal Edge, one of our trusted Marketplace partners, it covered all of the new UK HR laws and employment law changes in the UK across 2024, and 2025 so far.
This round-up is adapted from that webinar — bookmark it so you can easily find this info whenever you need it.
If you want more exclusive content such as workshops and webinars covering all sorts of topics, from employment law to cyber threats, check out our upcoming Charlie Advice events here.
As a small business, it’s essential to stay on top of any new UK HR laws and employment law changes coming into place. This is to help you:
Your HR policies, processes, and records must comply with any changes to employment law. This ensures you pass potential audits and stay on the right side of the law – without losing track of legal requirements or your employees’ rights. It’s also a great way to protect yourself now, but also for the future to avoid any disruption to your workplace environment.
HR errors can result in expensive legal action — UK tribunal claims increased to over 97,000 cases in 2024. As a small business, staying informed is one of the best ways to avoid this as taking such a massive financial hit could be lethal to your future.
Your people will be looking to you for guidance and support when it comes to what’s legal and what’s not. They can also choose to seek it outside of your business, so you always want to be one step ahead to answer any questions and respond to queries. It will help you foster the trust they need to know you’re on their side, and compliant with UK employment law.
Human resources isn’t a fixed thing: you should always be striving to improve how you support your employees. But first, and to avoid any stress caused by rushed decisions or last-minute changes, you should aim for solid foundations if you haven’t followed the rules in the first place. You’ll then just need to update them as you go. If you’re unsure where to start, our Charlie Advice team can help you figure it out.
Staying on top of employment law changes is a sign of a good employer. And that’s who good candidates want to work for, so if you want to hire top talent, make sure you’re 100% in line with the latest employment law updates – and you don’t get hit by bad publicity. No one’s ever won by being on the wrong side of the law.
The employment law changes that matter most to you as a small business are the National Minimum Wage and statutory pay updates:
The rates for the National Minimum Wage change on April 1st every year.
The changes that came into force in April 2025 are:
The reason behind these across the board increases is the rising cost of living.
Like the National Minimum Wage, the rates for the National Living Wage change yearly on 1st April. Employees must be 21 years old or over to get the National Living Wage.
So in April 2025, the National Living Wage increased to £12.21 an hour.
The latest budget did confirm that these steps are the first in trying to align the National Living Wage and National Minimum Wage to create a single ‘Adult Wage Rate’ within the UK.
Under the new UK HR laws, Employer National Insurance contributions also increased to 15%.
You can find the rates and thresholds for employers for 2024 to 2025 on GOV.UK and use them when you operate your payroll or provide expenses and benefits.
Another of the employment law changes (UK, 2025) was that accommodation offsets increased by 67p to £10.66.
The statutory pay updates UK from 6th of April this year are:
[.c-box-inline]The National Minimum Wage, National Living Wage and statutory pay updates are now required by law, so you must ensure your business fully complies.[.c-box-inline]
The other significant change from April this year is the new neonatal leave UK entitlement.
The Neonatal Care Leave and Pay Act was passed in 2023, and now applies to all employees who have a baby born after the 6th April 2025.
This law change means that parents of babies who are admitted to hospital for neonatal care before they are 28 days old, and for seven continuous days, will get a maximum of 12 weeks’ leave.
Any neonatal leave must be taken within the first 68 weeks of the baby’s birth date.
In order to qualify for Statutory Neonatal Care Pay (SNCP), an employee must have been with a company for a minimum of 26 weeks, and earn more than the £123 per week earning threshold.
The new neonatal leave UK entitlement mirrors maternity pay, which means that those eligible will be paid at the SNCP rate, in addition to maternity or paternity leave pay.
These changes are set to benefit over 60,000 new parents in the UK.
[.c-box-inline]All employers need to be aware of the new Neonatal leave entitlement and understand how they should support any applicable employees.[.c-box-inline]
The Employment Rights Bill 2024-25 was introduced in October 2024, and applies mainly to England, Scotland and Wales (employment law is devolved in Northern Ireland).
The bill covers reforms to many areas of employment law, including unfair dismissal, flexible working, statutory sick pay, family leave, and protections against harassment, and fire and rehire.
Here’s what we currently know about the upcoming employment law changes.
The new UK HR laws we know are likely so far are:
The government’s plan is to widen eligibility for Statutory Sick Pay (SSP), which means that up to 1.3 million more employees who currently aren’t entitled to it could soon qualify.
In addition to this, the three day waiting period will be removed — meaning SSP would kick in from day one of sickness, instead of day four like it is now.
For small and large businesses alike, this could mean an increase in costs when employees are off sick.
We don’t know exactly when this change will be coming into effect, or what it will fully look like, but this is likely to be a big one and will affect all businesses who offer SSP.
Think about offering more to your small business employees. It might seem daunting to offer sick leave, but it actually encourages your team to take time off only when they really need it (especially if you already offer flexible working).
At Charlie, we offer 20 days of fully paid sick leave per year. This allows team members who need surgery or face a long recovery to take the time they need — and return to work without added stress.
Another of the employment law changes proposed is for flexible working to become the default, unless it’s genuinely not feasible.
The government’s plan aims to ensure that more people have access to working arrangements like flexitime, remote working, and term-time schedules.
For employers, this means being prepared to consider flexible options from the outset, and it will likely look different across different organisations.
The key to handling any flexible working changes, and employment law changes in general, will be having clear company policies in place so that your managers are equipped to handle all requests fairly and consistently.
Get comfortable with being flexible! The flexible working law will be a big shift for UK businesses, but it opens up opportunities for a more diverse and engaged workforce.
Working flexibly can really help to attract and retain good people — we’ve seen this for ourselves at Charlie. We give our team full ownership over how and when they get their work done, and have only seen a growth in productivity and positivity as a result.
Unpaid internships are likely to be banned under these new UK HR laws, unless they’re part of an education or training course.
The rationale behind this is to protect people from being exploited, and working for free without gaining real value or experience.
We don’t yet know how an 'internship' will be defined, but it’s something to keep an eye on — especially if you’re a business that offers placements or internships.
Under the expected employment law changes, ‘fire and rehire’ (the practice where someone is dismissed and then immediately offered a new and often less favourable contract) is going to be more strictly regulated, and possibly banned altogether.
There are some additional employment law changes proposed that will have more of an impact on larger businesses, but they’re still worth being aware of:
Collective consultation are rules you have to follow when making over 20 people redundant, and it looks like they’ll soon have to be applied across your whole business (not just within a single location).
That means if you're making more than 20 redundancies anywhere, even across multiple sites, you’ll need to follow the formal consultation process.
As a result, employers will need to track redundancies business-wide and follow the correct process, as penalties for not complying may increase.
This employment law change should only affect large businesses with multiple sites across the UK.
We also have a guide specifically on redundancy consultations to help you out.
The new UK HR laws look set to include stronger rights around zero hours contracts, including the ability to request average-hours contracts.
Employees will have the right to request guaranteed hours based on their usual work pattern. So if someone consistently works 20 hours every week on average, they’ll be able to request guaranteed hours on that basis.
They’ll also be entitled to reasonable notice of shifts and payment if their shifts are cancelled last minute.
Planning and communication will be key to successfully navigating this employment law change.
None of these upcoming employment law changes are yet in effect.
Everything must pass through Parliament, and could take up to two years to become law.
Because small businesses have fewer boots on the ground, changes in HR legislation can mean a lot of work.
And as it’s likely that we’re going to see some fundamental employment law changes in the next two years, getting a step ahead now will make all the difference.
The best preparation for employment law changes like this is to have robust policies in place and train your managers to ensure compliance with HR best practice.
We’re going to see a lot of employment law changes in 2025/26 — some of the biggest changes we’ve had in years. All businesses will be impacted in some form or another, so it’s really important to stay in the loop.
To help you prepare well, here’s our quickfire checklist:
The new UK HR laws will be a large administrative burden, especially if tackled all at once, but getting started sooner rather than later will make a big difference to your business and your stress levels.
Remaining compliant is key, and being aware of the changes as they develop will mean you have a headstart for when they are implemented.
Although the upcoming employment law changes can seem daunting, and it’s no question they’ll have a big impact on small businesses, most of their negative impacts can be prepared for and mitigated.
If you’re feeling overwhelmed by the employment law changes (UK 2024 or 2025) or upcoming new UK HR laws, Charlie Advice can help.
There’s no need to hire someone dedicated too soon for your HR and overstretch yourself — you can get ad hoc support from Charlie’s expert HR advisors whenever you need it.
Our advisors will:
You can book a free call to chat with one of our HR Advice team today.
And if you’d like to find out about upcoming webinars like the one this guide is based on, follow us on LinkedIn or subscribe to our newsletter.
