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Employment Law General Update – March 2025

  • Anne-Marie Pavitt,

  • 26th March 2025

Employment Law

With a new government and budget comes a lot of change. This month we report on changes to immigration rules and fees, the results from an independent report published by the Departments for Work and Pensions and Business and Trade about how we can reduce economic inactivity related to people unable to work due to ill-health and disability, a government consultation on proposed mandatory pay reporting affecting ethnicity and disability, and a government response to an official report on statutory sick pay. Lastly, a new campaign has been launched by ACAS to improve understanding and support for neurodivergent workers, as we become more aware of this element of our workforce.

  • Immigration: Changes to UK Immigration Rules, and fees increase on 9 April 2025
  • Disability: Keep Britain Working Review
  • Equality (Race and Disability) Bill: Government issues consultation on mandatory ethnicity and disability pay reporting for large employers
  • Statutory Sick Pay: Government responds to Work and Pensions Committee report
  • ACAS: Campaign launched to improve understanding and support for neurodivergent workers

Immigration: Changes to UK Immigration Rules, and fees increase on 9 April 2025

On 12 March 2025, the government published a Statement of changes to the Immigration Rules. The main changes include:  

  • From 12 March 2025, nationals of Trinidad and Tobago are being classified as “visa nationals”, requiring them to obtain a visa before travelling to the UK.
  • From 2 April 2025 and 9 April 2025 respectively, certain French children visiting the UK on a school trip and British National (Overseas) nationals will not require Electronic Travel Authorisation prior to travelling to the UK as a visitor.
  • From 9 April 2025, there will be changes to the minimum salary threshold for some Skilled Workers (increasing from £23,200 a year to £25,000 a year) as well as some sponsorship protection introduced for care workers and senior care workers.
  • From 9 April 2025, there will be restrictions on permitted salary reductions for Skilled Workers.  

In January 2025, the government announced its intention to raise immigration fees and charges . The Immigration, Nationality and Passport (Fees) (Amendment) Regulations 2025 (SI 2025/363) have now been passed. Consequently, the Home Office has published details of the new immigration fees, which take effect at 9.00 am on 9 April 2025. Most visa application fees are due to increase by approximately 5 to 10%. The most notable changes include: 

  • The Certificate of Sponsorship (CoS) fee under the Skilled Worker, T2 Minister of Religion, Global Business Mobility – Senior or Specialist Worker and International Sportsperson routes will increase by almost 120% from £239 to £525. Where possible, sponsors may wish to assign a CoS prior to 9 April 2025 to avoid this increase.
  • The Electronic Travel Authorisation (ETA) fee is rising from £10 to £16.
  • Naturalisation as a British citizen will increase from £1,500 to £1,605. The sponsor licence application fee will also increase from £1,476 to £1,579 (for large sponsors) and from £536 to £574 (for small sponsors).  

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Disability: Keep Britain Working Review

On 20 March 2025, the Departments for Work and Pensions and Business and Trade published an independent report, Keep Britain Working Review: Discovery. It is the first stage in Sir Charlie Mayfield’s review of economic inactivity due to ill-health and disability. The review will consider what can be done to address this inactivity, and to support people back into work and to stay in work. The report, which sets out how economic inactivity is viewed and the issues that may need to be addressed to improve it, will be followed by an engagement phase focusing on prevention and pathways back to work (running until the end of May 2025) and then recommendations to the government.

The report notes that the UK appears to be the only advanced economy where economic inactivity is increasing, with 40% more people of working age economically inactive for health reasons than there were in 2019. The growth in the number of people who are becoming economically inactive for health reasons is nearly ten times the growth of the working age population. The largest increases were observed among younger people (aged 16 to 34), with an increase of 1.2 million or 77%. Nearly one in four people out of work due to ill-health are under 35.

The report identifies three areas that are likely to be the focus of future recommendations:

  • Employer incentives. At critical moments in managing absence, incentives for employers to retain employees are muddled or misaligned between employers and employees.
  • Interventions. When individuals face ill-health, fluctuating conditions or work barriers, there is often a delay before they access effective support and treatment (especially related to mental health). This leads to deterioration in outcomes and longer periods out of work, as well as early exits.
  • Case management. When individuals are absent from work because of ill-health or disability, there is often little in the way of effective case management or leadership.

The report also highlights five principles underpinning effective labour market design: strong employer incentives for prevention and retention, early intervention and structured return-to-work support, sufficient support during sickness while maintaining a dynamic labour market, alignment between government and employer roles, and minimising structural barriers to re-employment.

In developing its recommendations, the review will reflect on the reform options being considered as part of the White Paper, Get Britain Working.

The review’s recommendations are expected in autumn 2025.

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Equality (Race and Disability) Bill: Government issues consultation on mandatory ethnicity and disability pay reporting for large employers

On 18 March 2025, the government published a consultation on how to introduce mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees, in line with its manifesto commitment.

The government proposes using a similar framework to that already in place for gender pay gap reporting. The same employers would fall within scope, the same six measures of pay would be reported and the same snapshot and reporting dates would be used. However, employers would also be required to report the overall breakdown of their workforce by ethnicity and disability, and the percentage of employees not disclosing their data. Large public bodies may be required to publish additional information on ethnicity, including pay differences by grade or recruitment, retention and progression data. Views are sought on whether employers should also be required to produce action plans.

In contrast to gender pay gap reporting, employees would be asked to self-report their ethnicity and disability status, with an option to opt out. The government proposes using standardised ethnicity groupings. Given data protection considerations, it proposes a minimum of ten employees in any ethnic group being analysed. Smaller groups may need to be aggregated. It is proposed that all employers should report, at a minimum, a binary comparison, preferably between White British employees and all other ethnic minority groups combined. Similarly, with disability reporting, a minimum of ten employees must fall in each group being compared. To avoid the risk of individual identification and the complexities of multiple impairments, the government proposes that disability reporting should take a binary approach of only reporting differences between disabled and non-disabled employees, rather than by type of impairment.

Alongside the new consultation, the government published the findings of the disability workforce reporting consultation carried out by the previous Conservative government in 2021-22. The findings had not previously been published. The consultation showed strong support among both employers and employees for the mandatory collection of disability workforce data by large employers. However, there were concerns, mainly from employee respondents, that reporting would become a tick-box exercise, with no real impact, and that employees may feel forced to self-disclose personal data.

The consultation closes on 10 June 2025. The findings of the two consultations, as well as a forthcoming call for evidence, will inform the government’s approach to the draft Equality (Race and Disability) Bill, to be published in the current parliamentary session.

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Statutory Sick Pay: Government responds to Work and Pensions Committee report

On 14 March 2025, the government responded to a report published by the House of Commons Work and Pensions Committee (the Committee). The report was published in March 2024 under the previous Conservative government and had called for a substantial overhaul of the statutory sick pay (SSP) framework ahead of the 2025-26 financial year.

Some of the Committee’s recommendations will be addressed by changes to SSP being made by the Employment Rights Bill (ERB). Removal of the current three-day waiting period will assist with phased returns to work (because SSP will be payable for single days of sickness absence). The lower earnings limit (LEL) for SSP eligibility will be removed. People earning below the current rate of SSP will receive 80% of their normal weekly earnings. The government will update guidance to account for these changes and, as part of this, will seek to clarify the operation of SSP for agency workers.

Contrary to the Committee’s recommendation, the government will not equalise the rate of SSP with the flat rate of statutory maternity pay (SMP). It reasoned that SSP and SMP are paid for different reasons. Employers can plan for maternity leave absences (because they receive at least 15 weeks’ notice) and they can claim back up to 92% of SMP, with those qualifying for Small Employers’ Relief claiming back up to 103% of their SMP payments. In contrast, employers pay the full cost of SSP. Modelling by the Department for Work and Pensions (DWP) estimates that equalising SSP with the rate of SMP would cost businesses an additional £500 million per year when they already face the cost of removing the waiting period and LEL.

Declining to accept the recommendation for a small business rebate for SSP, the government suggested that having responsibility for sick pay encouraged employers to support employees to return to work. The forthcoming review, Keep Britain Working, will consider how employers can be supported in promoting healthy workplaces that enable people to stay in, or return to, work. The Percentage Threshold Scheme, which had provided rebates in certain circumstances until its removal in 2014, had been administratively complex and underused.

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ACAS: Campaign launched to improve understanding and support for neurodivergent workers

On 20 March 2025, ACAS launched a campaign to improve understanding and support for neurodivergent workers. The campaign will equip employers with resources and advice to help foster a culture of belonging, where neurodivergent workers can thrive.

The focus of the campaign will be on practical steps employers can take to make work environments more accessible. These will include:

  • Inclusive hiring practices. Ensuring recruitment processes accommodate different cognitive styles.
  • Reasonable adjustments. Providing tailored support, such as flexible work arrangements and assistive technology.
  • Workplace awareness. Educating employers and staff about neurodivergence to reduce stigma and increase understanding.

Alongside the campaign, the Department for Work and Pensions has formed a new expert panel on neurodiversity and employment. The panel is set to examine employment outcomes for neurodivergent people. Running until the summer of 2025, it is expected to provide evidence-based recommendations to inform workplace practices and policy. The panel will consider all types of neurodivergence. It will also explore key barriers to employment and workplace success, effective employer actions to enhance inclusion, government policies that could drive systemic change, the economic benefits that are linked to greater neurodiversity in the workforce, and intersectionality (including how social deprivation, gender and ethnicity impact neurodivergent employment outcomes).

ACAS states that employers should prepare for, among other things, better accountability in ensuring that recruitment and workplace policies support neurodivergent people, more practical guidance, and a stronger evidence base to underpin the benefits of neuroinclusive practices.

The campaign launch and panel formation follow the recent publication of ACAS advice on neurodiversity and a report by researchers at Birkbeck, University of London.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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Employment Law General Update –  December 2022

  • Employment,

  • 12th December 2022

Employment Law

This month’s law update brings you a variety of ways to improve the workplace to make life better for employees and move the workforce forward. We have proposals on the reform of flexible working, a report advising the UK Financial Services sector on how to support and improve the under-representation of ethnic minorities in its sector, advice on supporting the health of male staff, and a report on inclusion of socio-economic diversity in the financial and professional services. And the changes don’t stop there – new company car rates apply from 1 December and various employment benefit rates are to be increased from next April.

  • Flexible Working: BEIS publishes consultation response on proposal to reform flexible working regulations
  • Equality: Race to Equality in UK Financial Services report by Reboot
  • Health at Work: Mental and physical health support for male staff beyond Movember
  • Inclusion: Socio-Economic Diversity taskforce publishes class barrier report
  • Employment Benefits: Rates of SMP, SSP, Maternity Allowance etc to be increased in April 2023
  • Company Cars: Advisory fuel rates from 1 December 2022

Flexible Working: BEIS publishes consultation response on proposal to reform flexible working regulations

The Department for Business, Energy and Industrial Strategy (BEIS) has published the government response to the consultation on its reform to make flexible working the default which was launched in September 2021. Following the changes to working during the coronavirus (COVID-19) pandemic, the consultation included a set of proposals which were built around the principle that working arrangements were best decided through a constructive, open-minded discussion between employer and employee. The government response confirms its intention to introduce several different measures in relation to flexible working. A total of 1611 responses were received for this consultation, of which 83% were from individuals.

Measures to be implemented by the government include:

  • removing the 26-week qualifying period before employees can request flexible working, making it a day-one right;
  • adding a new requirement for employers to consult with their employee when intending to decline the request for flexible working;
  • allowing employees to make two flexible working requests in any 12-month period, rather than only one as currently allowed;
  • reducing the time limit for an employer to respond to a flexible working request from three to two months; and
  • removing the requirement for employees to detail the effects of their flexible working request on the employer and to include ways on how it might be dealt with.

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Equality: Race to Equality in UK Financial Services report by Reboot

Reboot, a campaigning group of senior financial services industry professionals, has published its 2022 report on addressing the under-representation of ethnic minorities in the UK financial services sector. The report shows that 68% of ethnic minority employees have experienced discrimination and a shocking 82% have experienced unwelcome comments or conduct at their organisation based on their background in the last 12 months. The report provides financial services businesses with a three-point plan for the support of ethnic minority employees and to form a diverse workspace:

1. Leaders take charge

To remove barriers to progress, leaders have to set the tone and not outsource diversity and inclusion. By championing the cause from the top and supporting ethnic minority role models within the business, it will help to empower workforces and create an environment where employees feel comfortable to talk about race, just like we have observed with gender diversity.

2. Challenge negative office cultures

Poor attitudes in the workplace are still hindering progression. Racism has no place in the modern workplace, and it is telling that ethnicity-related jokes are still heard in offices across the industry. These behaviours need to be challenged and extinguished if we are to create a safe working environment for those of every background.

3. Close the gap and be transparent

The majority of all respondents believe ethnicity pay gap reporting should be mandatory. More transparency on ethnicity data reporting will therefore mean companies will have to become more accountable – and this will help build a sustainable roadmap. Furthermore, organisations that can show that they are fair will be more attractive to employees, customers, and investors.

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Health at Work: Mental and physical health support for male staff beyond Movember

People Management has published an article by Dr Bernard Yew about how employers need to take care of their male employees because research shows they are falling behind, despite a whole month highlighting specifically male health issues – Movember is all about raising money and awareness for the prostate cancer charity. According to the article:

  • Male employees are still twice as likely as female employees to feel that their employer doesn’t care about their wellbeing.
  • 16 per cent of men feel work provides little or no wellbeing support, compared to just 8 per cent of women.
  • One in two also say that working for their employer has undermined their health or caused them to become sick (despite two-thirds of male employees believing their employer has responsibility for their health and wellbeing).

One of the causes given is that gendered stereotypes persist, with men sometimes seen to be less in need of emotional support at work, despite two-fifths (40 per cent) of men saying emotional worries are their biggest wellbeing concern. Financial worries are the second biggest wellbeing worry after emotional health, with two-fifths of men saying their ability to manage finances is one of their biggest wellbeing challenges. This is closely followed by concerns about their weight, risk of developing cancer and not getting enough sleep. Given that the Samaritans claim that ‘Middle-aged men are more likely to die by suicide than any other age group’ it should give employers cause for reflection.

Critical to transforming this is encouraging managers to make a habit of conducting ‘check-in chats’ with men, as well as women, to ask them how they are, instead of just talking about goals and targets. Although these conversations can feel a little awkward at first, 28 per cent of men say a supportive manager is important for helping them to stay healthy. Men are also much more likely to utilise support services at their managers’ suggestion, than if left to initiate asking for support themselves, the article continues.

Given the long hours spent in work means employers have a vital role to play when it comes to supporting men to reduce health risks. Dr Yew suggests strategies such as:

  • Enabling employees to access healthy food during the day, with education on how to batch cook and quickly reheat healthy food.
  • Encouraging employees to go out during their lunch break to stay active.
  • Offering simple finger-prick blood tests to help men identify risk factors, such as diabetes and high cholesterol, which can increase the risk of cancer and heart disease.
  • Enabling men to access healthcare easily (47 per cent of men find it difficult to access their doctor or GP, while 56 per cent have been personally affected by delays accessing NHS support, add to that the general reluctance of men to see support and brush concerns aside).
  • Using occupational health services, ranging from virtual GP and physiotherapy services to onsite clinicians.

To read the article in full, click here.

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Inclusion: Socio-Economic Diversity taskforce publishes class barrier report

The Socio-Economic Diversity taskforce has published a Five Point Pathway aimed at tackling the lack of socio-economic diversity at senior levels in the financial and professional services sectors. The Pathway, which is the culmination of two years’ work, consists of recommendations from the employers, sector bodies, regulators, and government on how to break the class barrier and create a more welcoming environment for a more diverse pool of talent.

The five points (or steps) on the pathway are leadership, assess, take action, set goals, and publish and involve different processes depending on which set of institutions an organisation belongs to. For employers:

1. Leadership

The starting point step is appoint creating clear accountability and responsibility for socio-economic diversity within an organisation. The Taskforce recommends appointing a senior champion as well as a system of reporting on ongoing strategy and progress in increasing socio-economic diversity at senior levels. Employers should aim to incentivise senior leaders and managers to meet targets.

2. Assess

Step two revolves around the collection of data to understand the current socio-economic make-up of the workforce. The taskforce recommends collecting data from the entire workforce on an annual basis and analysing this against different levels of seniority. Transparency is also important in this step as showing employees how the data is used and handled is more likely to build trust in the process.

3. Take action

Step three of the pathway is about taking positive action to increase inclusion and support the progression of those from non-professional backgrounds into leadership positions. The taskforce recommends the development of role models and ‘champion networks’ within an organisation as well as analysing recruitment and promotion processes to ensure they do not involve barriers to progression.

4. Set goals

Step four involves setting targets once data has been collected to incentivise actions which increase an organisation’s socio-economic diversity. The taskforce recommends setting targets for employee self-disclosure and taking a holistic view of data collected alongside other characteristics such as gender and ethnicity.

5. Publish

The final step is about public accountability. The taskforce recommends that employers publish their data on socio-economic gaps publicly and share any progress made towards closing the gaps with employees, investors and clients.

Co-Chair of the Socio-Economic Diversity Taskforce and Chair of Progress Together, Alderman Vincent Keaveny, commented “Socio-economic diversity is key to all sectors. It is vital that firms take action to create a more equitable pathway to the top for people from all backgrounds. I am excited to continue this great work as Chair of Progress Together so we maximise the potential of talented people and boost productivity.” The full report can be read here.

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Employment Benefits: Rates of SMP, SSP, Maternity Allowance etc to be increased in April 2023

According to a Statement to Parliament by Mel Stride, the Secretary of State for Work and Pensions, and proposals set out in a Department for Work and Pensions policy paper, in April 2023, State Pension and benefit rates will increase in line with the Consumer Prices Index (CPI) for the year to September 2022. This means that they will increase by 10.1% from 10 April 2023. Accordingly, the following employment benefits will apply from that time:

  • the rates for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, Statutory Parental Bereavement Pay and Maternity Allowance will all increase from £156.66 to £172.48 per week, and
  • the rate for Statutory Sick Pay will increase from £99.35 to £109.40 per week.

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Company Cars: Advisory fuel rates from 1 December 2022

HM Revenue and Customs (HMRC) has published revised advisory fuel rates for company cars which apply from 1 December 2022. The full information can be read here.

Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

Back

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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