2025 is now here; for many businesses, it is all about plans for the new tax year and how to encourage growth.
However, in the UK, some new employment laws are coming up, which may be difficult to implement for small businesses with minimal resources. You will need to ensure that your business is compliant, not only for legal needs but also to ensure that your workplace is healthy and thriving.
If you are not sure how best to implement these changes, this article will walk you through them and will recommend the best ways to ensure you are following legal compliance.
Understand the New Regulations
As is the way with anything new, you need to ensure that you and your managers are familiar with what is expected on April 1st when it comes to employment law change 2025.
For instance, one of the most prominent changes is the increase in minimum wage, from £11.44 to £12.21 for those over the age of 18. So, if you have a small business, you will need to seek legal and tax advice on how best to budget for this in a sustainable way.
Evaluate Current Policies
Small business owners are also advised to conduct a review of their employment policies to check any areas that may need to be updated.
As before, this will include the rise in minimum wages, as well as employer national insurance increases, but you will also need to look into The Employment Rights Bill, as this covers areas such as trade union powers, as well as zero-hour contracts, and sick pay. Check your current employee handbook or, seek legal advice about which areas will need to be updated to stay in line with the upcoming changes.
Communicate With Employees
As it is common news that the employment laws are set to change, it is unlikely that any employees you have will not have heard about them.
However, it is advised that small business owners proactively inform their workforce about changes to wages and, if necessary, working hours. It is best to send this information in an email or internal portals as then, you will have a physical and digital copy of the changes, as well as when they were sent to employees. Should any legal ramifications occur, this will help your legal case.
Update Payroll and Benefits Systems
As the main thing that is going to impact many small businesses is the change in minimum wages, as well as other areas such as maternity and paternity leave, if applicable, you will need to apply said changes to the payroll systems that you have.
If you use automated software, this will simplify this area, as many of these platforms can automatically be adjusted to new wage laws, as well as tax codes. If you outsource your payroll, if you have not done so already, you should meet with vendors to ensure that the changes will be implemented on time.
This will help to prevent penalties and legal recourse from employees.
Monitor and Audit Compliance
You will, of course, need to ensure that you or your managers continuously monitor these changes to ensure that no area has been missed. Try to conduct an internal audit, which should focus on payroll accuracy as well as workplace grievances.
Maintain all of the records of compliance efforts as, if there is an inspection or dispute, this will prove to be invaluable. As before, try to ensure that you keep digital and paper versions.
Seek External Support
As a small business owner, all of these changes can seem impossible to oversee by yourself, as you may lack the in-house expertise to navigate them. Also, you may be worried as to how you can tailor these changes to meet the needs of your business.
Do not panic! You can seek advice from employment solicitors, and if you want to grow your business in 2025 in line with these employment law changes, you may want to consider outsourcing some of your HR functions. Independent HR companies will be up to date on all of these changes and can advise you on the easiest ways to implement them for your business and save you a few pennies!
Remember, it is normal not to be an expert on all areas of the law, and if you invest in expert guidance on these areas, you will save yourself time, reduce stress, and avoid any potentially costly penalties.
