As the start of a new tax year approaches there will be an increase to the statutory rates payable for certain employment rights that will apply from April 2025.
New National Minimum Wage rates
From 1 April 2025, the following hourly national minimum wage rates will apply:
- National minimum wage for those aged 21 and over: increase from £11.44 per hour to £12.21 per hour.
- National minimum wage for those aged 18 to 20: increase from £8.60 per hour to £10.00.
- National minimum wage for those aged 16 to 17: increase from £6.40 per hour to £7.55.
- Apprentice Rate: increase from £6.40 per hour to £7.55.
Employers will need to factor in these increases in the coming financial year.
Statutory Sick Pay
From 6 April 2025 the weekly rate of statutory sick pay (SSP) will be £118.75 per week (up from the current figure of £116.75 per week).
Employees must earn at least the lower earnings limit to qualify for SSP. This threshold is set to increase from £123 or more per week, to £125 or more per week, starting April 2025. Although it should be remembered that once it has been implemented, the Employment Rights Bill will remove the requirement for workers to earn over the lower earnings limit to qualify for SSP.
Family leave
From 6 April 2025 the prescribed rate of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, Parental Bereavement Pay, Statutory Adoption Pay and Statutory Neonatal Care Pay will go up from £184.03 to £187.18 per week.
Employer National Insurance contributions
From 6 April 2025 the employer National Insurance contributions rates will increase from 13.8% to 15%, with the threshold for contributions lowering from £9,100 to £5,000, meaning businesses will face higher employment costs.
Cap on a week's pay
From 6 April 2025 the statutory cap on a week's pay, used to calculate both the basic award for unfair dismissal and statutory redundancy pay, will increase from £700 to £719.
As a result, the maximum basic award in an Employment Tribunal for unfair dismissal will rise to £21,570 (£719 x 20 x1.5). Additionally, the upper limit for the compensatory award in unfair dismissal cases will increase from £115,115 to £118,223.
Annual increase to Injury to Feeling Awards: Vento Bands
The Equality Act 2010 provides that compensation for discrimination may include compensation for injured feelings.
When considering the amount to award for injury to feelings, the Tribunal will assess the facts of the case against the "Vento Bands" established by the Court of Appeal in the leading case of Vento v Chief Constable of West Yorkshire Police as set out below:
- The lower band: "appropriate for less serious cases, such as where the act of discrimination is an isolated or one-off occurrence"
- The middle band: "serious cases, which do not merit an award in the highest band"
- The top band: "the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment on the ground of sex or race"
The value of these bands increases from 6 April each year, but at the time of writing this blog, the rates for 2025/2026 are yet to be published. We shall update this blog as soon as they are.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
