Five HR updates to kick off 2025

It’s time to start looking at key employment law updates for the months ahead.

Last year, we saw a new government take the world of employment law by storm and announce major changes for your HR and Health & Safety. This included brand new leave entitlements, day one rights, and much more.

And now it’s January, let’s take a look at the first major updates to kick off 2025…

What’s update no.1? You’ll be able to “roll up” holiday pay once again

When will this take effect? 1st January 2025 (for new leave years that run from January to December)

While it was banned for a time, the previous government made it legal again to use the “rolled up” holiday pay method as a way of paying holiday to part-year and irregular hour workers only (which can be applied to new leave years on or after April 2024).

So if your leave year runs from January to December and you employ either permanent part-year or irregular hour staff (including zero hour workers), you can now start using this method too.

If you’ve not used the rolled up holiday pay method before, how it works is instead of splitting two separate holiday pay entitlements into two: holiday pay and normal pay, you can “roll” them into one payment.

This means you can pay your worker their holiday pay as an additional amount on top of their basic wage (calculated at a rate of 12.07% of their hourly pay for all work they’ve done in the pay period), and they’ll receive this extra pay at the same time as their normal pay throughout the year.

This means your worker won't receive holiday pay while they're off work as they would have already got it.

For full details about how rolled up holiday pay works and why this ruling came into force for certain workers, read more here

What's update no.2? Tribunals will be able to increase “fire and rehire” compensation awards by 25%

When will this take effect? 20th January 2025

In order to change an employee’s terms and conditions, some employers may choose to end their employment and then immediately rehire them under a new contract.

The idea is that employees either agree to a new contract or the working relationship ends. In legal terms, this practice is called “dismissal and re-engagement” but it’s more commonly known as “fire and rehire”.

While this practice is legal provided the employer follows a fair and full consultation process, it can lead to problems if an employee doesn’t agree to new terms or feels they’re being forced into accepting less favourable terms on the risk of losing their job.

To help ensure fire and rehire practices are as fair as possible, the previous government set up a statutory code of practice for businesses to follow. Labour has since proposed to strengthen this code as part of the new Employment Rights Bill.

Under a new law that will take effect from 20th January 2025, tribunals will have the power to increase the compensation you have to pay by 25% if you fail to follow the code of practice. You can find the full statutory code on the official government website.

What’s update no.3? National minimum wage will rise

When will this take effect? 1st April 2025

National Living Wage is set to rise by 6.7% for everyone who is aged 21 and over in April 2025, boosting from £11.44 to £12.21 per hour.

In last year’s Autumn Budget, the chancellor unpacked the new statutory rates for 2025 for all the age brackets. To see what’s changing, tap below:

Find out the new employee pay rates for 2025

What’s update no.4? Statutory payments will rise

When will this take effect? April 2025 (exact date in April TBC)

Statutory sick pay (SSP), maternity pay (SMP) and other family leave payments are set to rise in April 2025 too – although we’re still waiting for the exact date to be confirmed.

These are the changes to make note of:

What’s update no.5? There’ll be a new law on paid leave for parents of a newborn baby in neonatal care

When will this take effect? 6th April 2025

Last year, the previous government announced that they would be introducing a brand new paid leave entitlement.

This would go to the parents of newborn babies in neonatal care units, to give them more time off work to spend with their child.

Neonatal care leave gives eligible employees a right to additional time off, on top of maternity and paternity leave, if their child has spent more than one week in neonatal care and was admitted before they reached 28 days old.

Got a question about pending updates? Get free, one-to-one support

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