As we kick off the new year, it’s crucial for businesses to stay ahead of the curve when it comes to employment law changes.

Significant updates are on the horizon, with some taking effect this year and others setting the stage for 2026. Legal experts at Irwin Mitchell have highlighted key developments that HR professionals and line managers should prepare for in the months ahead.

The upcoming employment rights bill represents one of the most significant overhauls of employment law in recent years. While many changes won’t come into effect until 2026, organisations must start planning now to adapt their policies, budgets, and operations. These changes will impact employee rights, pay structures, and how organisations manage redundancies, family leave, and workplace practices.

Key changes to prepare for in 2025

Pay and wages

• National minimum and living wage
  From April, the national living wage for workers aged 21+ will rise by 6.7%, bringing it to 12.21/hour. Younger workers and apprentices will also see record increases, with the apprentice rate rising 18% to 7.55/hour.
• National insurance contributions
  Employers will face a 1.2% increase in national insurance rates, with the threshold for contributions lowering to 5,000/year. However, smaller businesses will benefit from an increased employment allowance of 10,500.

Holiday and holiday pay

New rules will simplify holiday pay for workers with irregular hours. From April 2024 (and now impacting many businesses), holiday...

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