Prepare for April 2025 Pay Changes – Is Your Business Ready?

As we approach April 2025, businesses across the UK must prepare for significant statutory changes that will impact payroll and compliance. With increases to the National Minimum Wage (NMW), National Living Wage (NLW), and statutory payments, now is the time to review your pay structures, budgets, and compliance measures to ensure a smooth transition.

What’s Changing from 1st April 2025?

From 1st April 2025, employers must comply with new wage rates, affecting over 3 million workers. The revised rates are:

• National Living Wage (for 21 and over): £12.21 per hour
• National Minimum Wage for 18 to 20-year-olds: £10.00 per hour
• National Minimum Wage for under-18s: £7.55 per hour
• Apprentice Rate: £7.55 per hour (for apprentices under 19 or in their first year)
• Accommodation offset: £10.66 per day

These changes mean businesses must reassess their payroll budgets and ensure compliance with the updated legal requirements.

Other Key Changes from 2nd April 2025

• Statutory maternity, paternity, adoption, shared parental, neonatal care, and parental bereavement pay will rise to £187.18 per week.
• Statutory sick pay will increase to £118.75 per week.
• Lower Earnings Limit will increase to £125 per week.

Additionally, while not a legal requirement, businesses accredited with the Real Living Wage must raise their pay rates to £12.60 per hour across the UK and £13.85 per hour in London by 1st May 2025 to retain accreditation.

What Happens if Employers Don’t Comply?

Failure to adhere to these new wage regulations can lead to serious consequences, including:

• Financial penalties of up to £20,000 per affected employee
• Legal action, including potential criminal proceedings
• Reputational damage, including being publicly named and shamed for non-compliance
• Requirements to repay underpaid wages, going back up to six years

Who Do These Changes Apply To?

The updated wage laws apply to all workers across the UK, except:

• Self-employed individuals
• Company directors
• Volunteers and those under school-leaving age
• Members of the armed forces, prisoners, or those on unpaid work experience as part of a course

Our CEO, Lisa Murphy, has long advocated for businesses to go beyond compliance and take proactive steps to close the gender pay gap. Lisa emphasises that  “transparency is just the start – organisations must take actionable steps to ensure fair pay structures and demonstrate a genuine commitment to workplace equality. Addressing pay disparities isn’t just a legal obligation; it’s essential for building a fair and inclusive workplace

How to Prepare Your Business

To stay ahead and ensure compliance, businesses should:

• Review payroll and salary structures to reflect the new rates
• Assess budget implications and plan accordingly
• Update employment contracts where necessary
• Communicate changes to employees in advance

Ensure payroll software and systems are updated for accuracy.

Are you confident your pay levels are correct, transparent, and sustainable?

We can help with job evaluation, benchmarking, and building a bespoke policy.

If your business is considering more drastic steps to your people strategy to cope with the planned increases, then get in touch so we can support you in exploring different options and advise you on any risks involved, so you continue to have a sustainable and successful business.

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