Top Employment Law Updates to Watch in 2025

Are You Prepared for Employment Law Updates This Year?

Keeping up with employment law updates is crucial for small to medium business owners. With the fast-changing legal landscape, understanding your obligations ensures compliance and reduces the risk of costly disputes.

At Herries Smith Solicitors, we specialise in providing expert advice to businesses, helping you navigate the complexities of employment law with confidence. Here’s a guide to the top employment law updates to watch in 2025 and how they might affect your organisation.

Flexible Working Requests

In 2024, flexible working rights were expanded, giving employees greater autonomy over their work arrangements. Previously, employees could request flexible working only after six months of employment. However, new legislation allow employees to make requests from day one.

Key details of the update:

• Employers must respond to requests within two months instead of three.
• Employees can make two requests per year, up from one.
• A refusal must be based on clear and reasonable business grounds.

How this impacts businesses:

For SMEs, accommodating flexible working requests may require adjustments to workflows and resources. Having a clear and fair policy in place will help manage these changes effectively.

2. Introduction of Carer’s Leave

The government’s commitment to improving work-life balance continues with the introduction of unpaid carer’s leave. Employees will be entitled to one week of leave per year to care for dependents with long-term care needs.

Important considerations:

• Carer’s leave can be taken flexibly, such as in half-days.
• Employees will not need proof of eligibility to take this leave.
• Action for employers:

Update your leave policies and train managers to handle carer’s leave requests sensitively. Clear communication with employees will help maintain trust and transparency.

Find out more via the Carers UK website.

3. Increased Focus on Mental Health in the Workplace

Mental health in the workplace remains a priority in 2025, with increased pressure on employers to provide support and minimise work-related stress. New guidance from the Health and Safety Executive (HSE) includes updated risk assessments for mental health alongside physical health.

Steps businesses should take:

• Conduct regular mental health risk assessments.
• Implement workplace wellness programmes.
• Train managers to identify and address mental health concerns.

Providing a supportive environment not only helps with compliance but also improves employee morale and productivity.

Find out more via the HSE website.

4. National Minimum Wage and Statutory Pay Rates

Annual updates to the National Minimum Wage (NMW) and statutory pay rates are expected to continue in 2025. These changes will impact salaries, sick pay, and maternity/paternity pay.

Projected rates for 2025 (subject to confirmation):

• National Minimum Wage for workers aged 23 and over: £11.00 per hour.
• Statutory sick pay: £110.00 per week.
• Statutory maternity and paternity pay: £175.00 per week.

What businesses should do:

Ensure your payroll systems are updated to reflect the new rates and communicate changes to employees promptly.

Check minimum wage rates on the Gov.uk website.

5. Stricter Enforcement of Gender Pay Gap Reporting

Businesses with 250 or more employees are already required to report their gender pay gap, but enforcement measures are expected to tighten in 2025.

Proposed changes include:

• Fines for non-compliance.
• Expanded reporting requirements, including ethnicity pay gaps.
• Greater scrutiny of action plans to address disparities.

Implications for SMEs:
Although smaller businesses are not currently required to report, demonstrating a commitment to pay equity can boost your reputation and attract top talent. Consider conducting an internal pay review to identify and address any disparities.

Check the Statutory Guidance via the Gov.uk website.

6. Updates to Redundancy and Consultation Procedures

Redundancy processes are expected to undergo changes aimed at increasing fairness and transparency. Proposed updates include:

• Extending consultation periods for collective redundancies.
• Providing additional support for employees facing redundancy, such as retraining programmes.
• Stricter requirements for documenting decision-making processes.

Best practices for employers:
Review your redundancy procedures to ensure compliance with updated regulations. Transparent communication and fair treatment will minimise the risk of disputes.

Read more on consultations for these procedures on the Gov.uk website.

7. Enhancements to Family-Friendly Policies

In 2025, family-friendly policies are set to be expanded to support working parents further.

Key changes include:

• Increasing statutory paternity leave from two weeks to four weeks.
• Enhancing shared parental leave options, making it easier for both parents to share childcare responsibilities.
• Greater protections for employees returning from parental leave, including safeguards against redundancy.

Advice for businesses:
Update your HR policies and ensure managers are trained on these changes. Offering enhanced family-friendly benefits can also be a competitive advantage when recruiting.

Read the Next Steps to Mark Work Pay paper via the Gov.uk website.

8. Stricter Rules on Employee Monitoring and Privacy

With the rise of remote work, monitoring employees has become more common. However, stricter rules on employee privacy are expected in 2025, balancing workplace monitoring with data protection laws.

What this means for employers:

• Employers must inform employees of any monitoring, including the purpose and scope.
• Monitoring must be proportionate and necessary, with minimal intrusion into private activities.
• Non-compliance could result in penalties under GDPR.

Next steps:
Review your monitoring practices and ensure they align with data protection laws. Transparency is key to maintaining trust.

Get an overview of employee monitoring at work via the Gov.uk website.

How Herries Smith Solicitors Can Help

Staying on top of employment law updates can be challenging, particularly for small to medium businesses with limited resources. At Herries Smith Solicitors, we specialise in helping businesses navigate these changes, ensuring compliance while protecting your organisation’s interests.

Our services include:

• Employment contract reviews and updates.
• Guidance on implementing new policies and procedures.
• Expert advice on handling disputes and grievances.

With our support, you can focus on running your business while we handle the complexities of employment law.

These Articles May Also Interest You:

The Role of Mediation in Resolving Workplace Disputes Effectively

Gender Pay Gap Reporting: Crucial Information Employers Must Know

Managing Workplace Harassment: Legal Obligations for Employers

Prepare for 2025 with Confidence

The employment law updates for 2025 bring both opportunities and challenges for businesses. By staying informed and proactive, you can ensure compliance, support your employees, and maintain a competitive edge.

Contact Herries Smith Solicitors today for expert advice and tailored solutions. From flexible working policies to redundancy procedures, our experienced team is here to help you navigate the year ahead with confidence.

Let us be your trusted partner in managing employment law, so you can focus on growing your business. Stay ahead of the curve with Herries Smith Solicitors.