November 5, 2024
Our employment team summarises the changes and what employers need to do about them now.
What are the main Budget measures employers need to know about?
On 30 October 2024, the Chancellor, Rachel Reeves, announced the following measures which will affect the payroll bills of employers of all sizes across the UK:
For the first time, the National Living and Minimum Wage is now being calculated in a way which takes account of the cost of living, a factor which the Government has said will be applied to all minimum wage increases going forward.
Note that the Real Living Wage, which is a separate rate to which many employers across the UK commit voluntarily, has also been increased as of October 2024. The Real Living Wage Foundation has announced that it will be £12.60 for workers outside London and £13.85 for workers in London.
When do these changes take effect?
The changes to the National Living/Minimum Wage and employers’ NICs will come into force on 1 April and 6 April 2025 respectively.
The changes to SSP will go through a consultation process before being finalised, so we don’t yet have a date for when these will be brought in.
What other employment changes should employers know about?
You might have read our recent coverage about the Employment Rights Bill, which was introduced to Parliament on 10 October 2024. The Bill will make huge changes to different areas of employment law in the UK, with the Government stating that its aim is to give workers and employees more employment rights, get the employment market moving and introduce better policing of how employment rights are upheld in practice. Some of the most significant changes are:
What does all this mean for employers and what should you do about it?
The Budget changes, combined with the measures announced a couple of weeks previously in the Employment Rights Bill, means that some employers will start to see significant changes to their payrolls and working practices from April 2025 onwards.
Employers should start looking at their budgets now and working out what the costs for your business will be. Once you’ve established that, workforce planning and identifying efficiencies may be needed. Remember that if you need to look at making changes to employees’ terms and conditions, this might be more difficult when some of the above employment law changes are brought in.
We’re covering the upcoming employment law changes in more detail in a free 45-minute webinar on 13 November (English) and 14 November (Welsh) 2024. Sign up for your free place today, or get in touch with Damian Phillips on 029 2082 9126 or dphillips@darwingray.com if you need advice about what to do next.