New UK laws coming into effect in April 2025 including minimum wage and sick pay

The new laws were announced in the first budget

A number of new laws are coming into effect from April including wage increases for more than three million workers, increases to parental leave pay and a National Insurance hike. Announced in Rachel Reeves' first budget as chancellor, national insurance contribution for employers is set to rise at the start of the 2025/26 tax year, plus more than three million UK workers will see a rise in their wage as the National Living Wage and National Minimum Wage rise by a significant amount.

There are other changes set to come into effect throughout the rest of 2025 and beyond, such as an update to The Employment Rights Bill which is expected at some point in 2026. The government said that the update to the bill is set to strengthen statutory sick pay, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in.

The MEN also reported that there are expected to be expansions to free childcare expected later this year. From September this year, working parents of children aged nine months and upwards will be entitled to 30 hours free childcare per week right up to their child starting school.

Working parents eligible for the provision are defined as those who individually earn more than £9,518 but less than £100,000 per year. If you’re in a couple, the rules apply to both of you, so you must both earn at least £9,518 and neither one of you can earn more than £100,000.

The new laws, previously set out by the Labour government at the end of last year, will come into force in the weeks after Ms Reeve's hugely controversial spring statement. The government announced a raft of spending cuts, including a plan to cut £5bn from the welfare state including major changes to disability benefits.

Here are the new employment laws coming into effect in April 2025.

Wage increase for more than three million workers

An increase to National Living Wage and National Minimum Wage means that more than three million workers will see a pay rise from April. The National Living Wage will increase from £11.44 to £12.21 an hour, a 6.7 per cent increase that will be worth an extra £1,400 a year for an eligible full-time worker.

Meanwhile, the National Minimum Wage, which is for 18 to 20-year-olds, will rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. The government has plans to eventually remove the age brackets for the National Living Wage and Minimum Wage to create a single rate for adults.

The minimum hourly wage for an apprentice will also be boosted next year, increasing from £6.40 to £7.55 an hour. According to the government, these increases mean that 3.5 million workers will receive a pay rise in April. Chancellor Rachel Reeves said: “This government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”

Increases to parental leave pay and sick pay

Coming into effect in April, the government will introduce higher rates for parental leave pay, such as statutory maternity pay. Statutory maternity pay, which is paid to eligible parents for up to 39 weeks, will go up from £184.03 per week to £187.18 per week.

Statutory paternity pay, statutory adoption pay, statutory parental bereavement pay and statutory shared parental pay will also go up to £187.18 per week. The earnings threshold for these benefits will go up from £123 to £125 a week, while the threshold for maternity allowance will remain at £30 per week. Statutory sick pay will rise from £116.75 per week to £118.75.

National insurance hike for employers

Employers will have to start paying higher National Insurance contributions from April. The employer rate of NI will rise by 1.2 percentage points to 15 per cent.

Announced by Ms Reeves during the Autumn Budget earlier this year, she also confirmed that the secondary threshold – the level at which employers start paying National Insurance on each employee’s salary – will be lowered from £9,100 per year to £5,000.

Ms Reeves also announced an increase from £5,000 to £10,500 to the Employment Allowance for small businesses, which allows eligible employers to reduce their NI liability. She said the additional move means that 865,000 employers won’t pay any National Insurance at all next year, and over one million will pay the same or less than they did previously.

Paid neonatal leave

The parents of sick and premature babies will be able to take paid neonatal leave from April 6. The statutory instrument will provide parents a day-one right to one week of neonatal leave and pay for each continuous week of neonatal care their baby receives up to a maximum of 12 weeks. It can be taken on top of any other leave parents may be entitled to, including maternity and paternity leave.