Employment Law Changes 2025: A Recap & What is Yet to Come

The UK employment landscape has seen a wave of reforms in recent years. From IR35 adjustments to flexible working requests, business leaders and hiring managers have had to adapt quickly to keep pace.

At Omega, we’ve already guided clients through key milestones, such as GDPR tightening and early IR35 reforms. Now, with further changes on the horizon, businesses must stay alert to ensure their hiring strategies remain compliant and future-proof.

In this blog, we break down what has already come into force and what is yet to come, and how recruitment agencies like Omega can help organisations navigate this evolving environment with confidence.

Employment Law Changes Already in Effect

1. Flexible Working from Day One

As of April 2024, employees gained the legal right to request flexible working from the first day of employment. Employers must provide a valid and reasoned response if rejecting such requests. For HR teams, this has meant updating policies, systems, and line manager training.

2. IR35 Reforms and Rising Compliance Costs

IR35 reforms continue to reshape the contractor market. By shifting responsibility for tax compliance to the end client or agency, these rules have increased administrative and financial burdens, raising contractor compliance costs by up to 30%. Businesses have been forced to re-evaluate how they engage contingent workers and manage payroll risk.

3. GDPR and PECR Enforcement

The UK’s Data Use and Access Act 2025 aligned PECR penalties with GDPR. This means fines can now reach up to £17.5 million or 4% of global turnover for breaches involving marketing, electronic communications, or employee data. Combined with ongoing GDPR enforcement, businesses must take data handling more seriously than ever.

4. Holiday Pay for Irregular and Part-Year Workers

From January 2025, rolled-up holiday pay was introduced as an option for irregular-hour and part-year workers. While this simplifies calculations for some employers, it also requires robust systems to ensure transparency and compliance.

Employment Law Changes Still to Come

1. The Employment Rights Bill (Late 2025 / 2026 Rollout)

This landmark reform will significantly expand employee protections. Expected provisions include:

• Day-one rights for unfair dismissal, sick pay, and parental leave.
• Enhanced protections against workplace harassment.
•  Removal of minimum service levels during strikes.

The Bill will be phased in, with some measures expected in autumn 2025 and others by April 2026. This will represent one of the most significant overhauls of employment law in decades.

2. Neonatal Leave and Pay (April 2025)

Parents of babies admitted to neonatal care will soon have the right to up to 12 weeks of statutory leave and pay. Employers will need to update HR policies and payroll systems to reflect this entitlement.

3. Parental Leave Review (Ongoing 2025–2026)

The Government has launched an 18-month review of maternity, paternity, shared, and neonatal leave. This review could bring further changes to entitlements, requiring employers to remain agile and ready to adapt.

What This Means for Business Leaders

Taken together, these reforms underline a clear trend: the balance of power in employment law is shifting towards greater flexibility and protections for workers.

For businesses, this means:

• More complex HR administration.
• Higher compliance costs and risks.
• Greater scrutiny of employment practices, from payroll to data handling.

The risk of non-compliance, whether through misclassifying contractors under IR35, mishandling flexible working requests, or failing GDPR obligations, has never been higher.

What This Means for Business Leaders

For businesses, this means:

• More complex HR administration.
• Higher compliance costs and risks.
• Greater scrutiny of employment practices, from payroll to data handling.

The risk of non-compliance, whether through misclassifying contractors under IR35, mishandling flexible working requests, or failing GDPR obligations, has never been higher.

Moving Forward

Regulatory change doesn’t have to slow your business down. With the right support, you can stay compliant, attract top talent, and turn change into opportunity.

At Omega, we help businesses navigate the complexities of employment law while keeping hiring strategies efficient, compliant, and future-ready.

Contact us today on 01453 827333 or send us an email at [email protected] for some confidential advice, no strings attached.