Key dates for small business owners in 2025

New employment legislation

Neonatal care leave and pay

The Neonatal Care (Leave and Pay) Act entitles eligible parents to take up to 12 weeks' neonatal care leave if their baby requires neonatal care. They will also be entitled to neonatal care pay if they meet further eligibility requirements to be set out in future regulations.

• When? Expected April 2025, although no firm date.
• Where? England, Scotland and Wales

Paternity Leave (Bereavement) Act 2024  

This introduces a day-one right to paternity leave for fathers and partners where the mother has died in the first year after birth or adoption. Regulations are required to bring this into force.

• When? No commencement date yet 
• Where? England, Scotland and Wales

Proposed employment legislation 

This is a summary of some of the key proposed changes in employment law in 2025 most relevant to SME employers, from statutory sick pay to new proposed legislation under the Employment Rights Bill. Please note that these changes are not yet law and there are no announced dates for these changes.

Statutory Sick Pay (SSP)

SSP is both administered and paid entirely by employers and is payable for up to 28 weeks per period of sickness absence. There is no government rebate available to employers on SSP paid to employees.

What is being proposed?

The government has proposed two changes which would widen the scope of SSP for eligible workers and as a consequence, potentially increase the cost of SSP for employers:

1. Removing the waiting period – Currently, SSP is not payable for the first 3 qualifying days (days on which an employee is contracted or scheduled to work) of a sickness absence, which are referred to as ‘waiting days’. In the government’s view, this means employees can feel forced to come to work when they are unwell, increasing presenteeism and reducing overall productivity.  The government is proposing to remove these 3 waiting days, so that SSP becomes payable from the first day of a worker’s sickness absence, instead of on day four. This means that where workers take ad hoc sick days (including for relatively mild and very short-term sickness, such as colds where the worker is too sick to work), unlike currently, workers will need to be paid SSP for those sick days.
2. Removing the Lower Earnings Limit – Currently SSP is also not payable to those who earn less than the Lower Earnings Limit (which is £123 per week until April 2025). The government estimates that there are currently between 1 and 1.3 million individuals who earn below the LEL, meaning they do not have access to SSP, and do not benefit from a minimum level of financial support from their employer during times of sickness. The government is proposing to remove the LEL eligibility criteria for SSP meaning that those who earn less than the LEL will become eligible for SSP. Where employees employ workers who earn less than the LEL, employers will need to pay SSP them for the first time once this legal change is made.

---

Summary of further employment law proposals for England, Scotland and Wales set out in the Employment Rights Bill:

Unfair dismissal: Day-one right

• Summary: Removal of the current qualifying period for unfair dismissal claims. Introduction of an initial statutory probation period.       
• Expected implementation: Autumn 2026.

Sick Pay            

• Summary: Abolition of the lower earnings limit for Statutory Sick Pay (SSP), making it universally available.
  Removal of the 3-day waiting period.  
• Expected implementation:During 2025 or 2026.

Parental Leave and Maternity Protection      

• Summary: Greater protections for employees on maternity or parental leave, including a restriction on dismissals during pregnancy and up to six months post-maternity leave, other than in specified circumstances.               
• Expected implementation:Not specified.

Zero-hour contracts

• Summary: Right for workers on zero-hour/low-hour contracts to receive guaranteed hours based on average hours worked, unless they prefer otherwise.
• Expected implementation:Not specified.

Minimum Wage

• Summary: Introduction of a single National Minimum Wage rate for all adults aged 18+, removing the lower rate for 18 to 20-year-old workers.        
• Expected implementation:This will be achieved via incremental increases to eventually close the gap between the lower rate for 18 to 20-year-old workers and the National Minimum Wage rate for adult workers aged 21+ from April 2025 onwards.

Flexible Working

• Summary: Employers must explain reason if rejecting a request for flexible working (a rejection to continue to be based on one or more of the existing statutory business reasons).       
• Expected implementation:Not specified.

Bereavement Leave   

• Summary: Day-one right to at least one week of bereavement leave for all employees.   
• Expected implementation:Not specified.

Fire and Rehire              

• Summary: Restrictions on "fire and rehire" practices, making it automatically unfair unless financial difficulties affecting the business’s financial viability justify the change. 
• Expected implementation:Not specified.

New Enforcement Body           

• Summary: Creation of the Fair Work Agency to consolidate enforcement of employment laws, including minimum wage and statutory sick pay.    
• Expected implementation:Not specified.

Third-party sexual harassment liability          

• Summary: Employers will be required to take all reasonable steps to prevent sexual harassment by third parties and right for employees to bring employment tribunal claims for harassment by third parties, such as customers and clients.              
• Expected implementation:Not specified.

Trade Union Rights     

• Summary: New duty on employers to inform workers of their right to join a trade union.  
• Expected implementation:Not specified.

Right to Disconnect   

• Summary: New statutory Code of Practice on right for employees to disconnect outside working hours.
• Expected implementation: Not included in the Bill. Implementation not specified.

Ban on Unpaid Internships    

• Summary: Ban on unpaid internships unless part of an official training or education program.    
• Expected implementation:Not included in the Employment Rights Bill, consultation in 2024/2025.

Employment Status   

• Summary: Removal of the 'worker' category, granting full employee rights to all workers.
• Expected implementation:Post-2026

See the Employment Rights Bill fact sheet on the FSB Legal and Business Hub for more details of these proposals.

Northern Ireland

New employment legislation

The Domestic Abuse (Safe Leave) Act (NI) 2022, will entitle employees and workers, who are victims of domestic abuse up to 10 days paid safe leave in each leave year for the purpose of dealing with issues related to that abuse.

Regulations are required to bring the Act into effect. It is not yet known when this will come into effect.

Proposed employment legislation

In Northern Ireland, The Department for the Economy has completed their consultation seeking views on changes to a range of employment policy areas for inclusion in an Employment Rights Bill. Some of the proposed legislation mirrors recent legislation introduced in the last few years in England, Scotland and Wales: The ‘Good Jobs’ Employment Rights Bill - Public Consultation (economy-ni.gov.uk).

A summary and any further updates on employment legislation in Northern Ireland can also be found on the Labour Relations Agency website.

Other proposed (non-employment) legislation

1. Tobacco and Vapes Bill

Should the Tobacco and Vapes Bill (TVB) pass through parliament a ban on sale and supply of single-use vapes in England is due to come into force on 1 June 2025.

As drafted the TVB will:

• Make it an offence to sell tobacco products to those born on or after 1 January 2009, thereby phasing out the sale of tobacco products, while not stopping anyone who currently legally smokes from being able to do so. This will mean anyone who turns 15 or younger in 2024 will never legally be sold tobacco products.
• Amend existing legislation to make it an offence for anyone over 18 to purchase tobacco products on behalf of those born on or after 1 January 2009 (proxy purchasing).
• Support the enforcement of the new measures by requiring retailers to update the current age of sale notices (or warning statements) to read: ‘It is illegal to sell tobacco products to anyone born on or after 1 January 2009’.
• Provide powers for ministers to regulate:
• The flavours and contents of vaping products.
• The packaging and product presentation of vaping products.
• Point of sale displays of vaping products.
• Make it an offence to sell non-nicotine vaping products to someone who is under 18 in England, Wales and Northern Ireland. Scotland already has this in place.
• Introduce a ban on the free distribution of vaping products to under 18s in England and Wales, and provide Northern Ireland with a power to also introduce a ban. Scotland already has these powers
• Provide ministers with powers to extend the measures outlined above for vaping products to other nicotine products such as nicotine pouches
• Provide enforcement authorities in England and Wales with the power to issue Fixed Penalty Notices of £100 for the underage sale of tobacco products and vaping products
• Continue to apply existing penalties to give Trading Standards the ability to escalate to a level 4 fine (up to £2,500), as well as restricted premises orders and restricted sales orders for repeat offenders in England and Wales.

Where? The Bill is UK-wide and has been developed in partnership with the Scottish Government, the Welsh Government and the Northern Ireland Executive.  It builds on the existing legal frameworks of all four nations to create a cohesive legal approach to regulating tobacco and vaping products.  The extent of the measures varies across the UK respecting the devolution settlement.

Further to this, in England only, the Environmental Protection (Single-use Vapes) (England) Regulations 2024 (SI 2024/1216) come into force on 1 June 2025, giving businesses time to adapt and run down stocks. The Welsh government has confirmed it will be in line with England after the UK government announced the same date for a ban, with Scotland and Northern Ireland expected to follow suit.

These regulations are intended to address the harms disposable vapes can cause for the environment, such as vapes ending up in landfill and creating fire and contamination risks, as well as the unknown long-term health risks including nicotine addiction. They make it illegal for a person to supply single-use vapes in the course of a business whether or not such supply involves the exchange of money. A single-use vape is defined as one that is not designed or intended to be reused. For a vape to be considered reusable it must be both rechargeable and refillable (not simply one or the other).

2. The Renters' Rights Bill

The Renters' Rights Bill (RRB) received its first reading in the House of Commons on 11 September 2024. As currently drafted, it contains various reforms to the private rented sector in England, and builds on the Renters (Reform) Bill 2023 which had been introduced by the previous government and which had been progressing through parliament until the general election halted its progress. This RRB is expected to come into effect in summer 2025, but we cannot be sure of that as yet. 

The law in Wales has already been substantially changed in 2022.

The main changes in the RRB (as drafted) include:

• The abolition of fixed-term assured tenancies and assured shorthold tenancies (ASTs).
• The abolition of "no-fault" evictions under section 21 of the Housing Act 1988.
• Amendments to the grounds for possession, aimed at providing tenants with more security.
• Tenants will have a 12-month protected period at the beginning of a tenancy, where they cannot be evicted for the landlord to move in or sell the property.
• The introduction of a "Decent Homes Standard" for the private rented sector, under which landlords may be prosecuted or find for failing to rectify serious hazards.

Other proposed changes include:

• Requiring social landlords to investigate and fix reported health hazards, enabling tenants to challenge dangerous conditions (e.g. damp and mould) and requiring landlords to act within specific timescales.
• Preventing landlords from having blanket bans on tenants with children, or those who are receiving benefits.
• Banning rental bidding wars. Landlords and letting agents must publish an asking rent and will be prohibited from requesting, encouraging or accepting bids above that price.
• Limiting rent increases to once a year, to the market rate, with a view to protecting tenants against "backdoor evictions" via rent increases during the tenancy.
• Giving tenants the right to request a pet, to which landlords cannot unreasonably refuse.
• Introducing an ombudsman (providing cost-effective dispute resolution) and a private rented sector database (helping landlords understand their obligations and providing information to tenants).

The RRB will now pass through the parliamentary process, and there are therefore various hoops which need to be jumped through before it is given Royal Assent and becomes law. In fact, until then, it cannot be 100% certain that it will become law or in exactly what form. Unless and until the RRB becomes law, landlords will be able to continue to carry out “no fault” evictions on their tenants.  There are, however, strict rules in place as to what a landlord needs to have done, and carried out properly, before he or she can evict a tenant, as well as set procedures which need to be followed to carry this out in accordance with the law.  Even after a “no fault” eviction notice is correctly served, a landlord always needs to apply to court to properly evict a tenant if they refuse to leave of their own volition. Getting this wrong can even lead to the landlord being prosecuted for unlawful eviction or harassment, as well as not being able to evict the tenant.  We have a large suite of factsheets and precedents available on the Hub for members to access, and there is a useful guide to the RRB available here.

Where?  The Bill applies in England only.

3. Data (Use and Access) Bill

The Data (Use and Access) Bill (DUAB) was introduced to parliament on 23 October 2024 . The last major change to data protection legislation in the UK took place in 2018 with the introduction of GDPR. More recently the Data Protection and Digital Information Bill (the DPDIB) had been going through the parliamentary process, which often takes a considerable time, and which meant it fell away with the dissolution of Parliament prior to the UK General Election in July 2024. It is not known if it will pass through parliament in time to become law in 2025.

Now we have the DUAB, which has the stated aims of attempting to harness the power of data for economic growth, support a modern digital government and improve people's lives, and which introduces provisions ranging from targeted reforms to update and simplify the UK data protection and privacy regime to the creation of a digital asset register to improve the efficiency and safety of underground work on broadband cables and utility pipes. Significant proposals which affect SMEs include (bit are not limited to):

A new lawful basis for processing personal data, to be known as "recognised legitimate interest".

• A list of "recognised" legitimate interests, as a legal basis for processing, to include various public interest purposes such as national security and defence, responding to emergencies and safeguarding vulnerable people for which no balancing test (i.e. the data controller's legitimate interests versus the rights and interests of the data subject) would be required.
• A list of other types of processing which may count as legitimate interests, including direct marketing purposes, sharing data intra-group for internal administrative purposes, and ensuring security of network and information systems. Many businesses will already be using the legitimate interests basis for processing in these circumstances.
• The Secretary of State can specify in the future further types of processing which qualify as "legitimate interests"
• A power for the Secretary of State (subject to parliament’s approval) to class further types of data as special category data. Special category data is generally data of a more sensitive nature, for example health data, political views, religious beliefs, sexual orientation, criminal records etc. This could increase the burden on SMEs given the additional protections that relate to this category of data.
• A relaxation of the rules on automated decision-making for personal data (except for special category data).
• Creating a new data protection test for transfers of personal data outside of the UK.
• "Smart data" schemes, to allow for the secure sharing of customer and business data.
• A regulatory structure for the provision of digital verification services.
• A new legal framework and asset register to improve the efficiency and safety of underground work on apparatus, such as broadband cables and utility pipes.
• Targeted reforms to update and simplify the UK GDPR, Data Protection Act 2018 and the Privacy and Electronic Commerce Regulations (which deal with electronic marketing amongst other things).
• Making healthcare information more easily accessible across all NHS trusts, GP surgeries and ambulance services.
• Services for the provision of electronic signatures, electronic seals, timestamps and other trust services.

Some proposed changes to the existing law which had previously been included in the DPDIB, have now been removed. This is no doubt because the government wants to ensure that the UK retains its adequacy status, for the free flow of personal data under the EU GDPR, as this does get reviewed at certain set points in time and to lose it would be problematic for UK businesses. The EU's adequacy decision for the UK means that the EU accept that the UK provides an "essentially equivalent" level of data protection as the EU, and therefore allows most data to flow between the EU and the UK without additional safeguards. Aspects which no longer feature in the DUAB include (but are not limited to):

• Proposed changes to the definition of "personal data", which had set out a subjective test, and which narrowed the scope of data caught by the UK GDPR.
• Proposed revision of the threshold for refusing or charging for data subject access requests from "manifestly unfounded or excessive" to "vexatious or excessive".
• Various measures which were intended to reduce the administrative burden on businesses, such as:
  • Limiting record keeping obligations.
  • Replacing mandatory Data Protection Officers with "senior responsible individuals".
  • Replacing Data Protection Impact Assessments.

The DUAB aims to ease compliance burdens on businesses and the public sector alike, but as you can see, that was also the aim of the previous Bill which has now been amended. The Information Commissioner’s Office (ICO) has made clear that in his view the proposals strike a positive balance and should not present a risk to the UK’s adequacy status. It’s hoped that many of the proposals should make compliance with data protection legislation easier. However, as we always say with parliamentary bills, one never categorically knows if, when, or in what form they will emerge into actual law, and therefore may be numerous changes to the DUAB as currently drafted.

Where?  The Bill is UK-wide.

As always, we recommend that you “watch this space” for further updates. Of course we will provide FSB members with detailed guidance and appropriate precedent documents as and when the DUAB passes through parliament and certainly well before it becomes law.

4. New recycling legislation

Under The Environment Act 2021 (Commencement No. 9 and Transitional Provisions) Regulations 2024:

• Non-household municipal premises, except micro-firms (businesses with fewer than 10 full-time equivalent – FTE – employees), will be required to arrange for the collection of the dry recyclable waste streams (excluding plastic films) by 31 March 2025.
• Non-household municipal premises, except micro-firms, will be required to make arrangements for separate food waste collections and to present the waste in accordance with the legislation by 31 March 2025.
• In cases where a non-household municipal premises does not produce any food waste, it is not required to arrange for its separate collection.

In summary, from 31st March 2025, those with 10 or more full-time employees will need to separate dry mixed recyclables and food waste from their general waste, prior to collection from their premises by their waste contractor, including:

• Glass.
• Metal.
• Plastic.
• Paper and card.
• Food waste.

Where? The Act applies in England only.

More detailed guidance is available of the GOV.UK website.

5. Aspects of the Economic Crime and Corporate Transparency Act 2023

Companies House (CH) has published its business plan which includes an outline of what it plans to deliver in relation to the Economic Crime and Corporate Transparency Act 2023 (ECCTA) in 2025. Amongst other things, under the business plan, CH intend to:

• Prioritise cleaning up existing information on registers by identifying and removing information known to be inaccurate. Query and reject information, where the information is clearly false, misleading or suspicious. Expedite striking off companies, where CH has evidence of fraudulent information. Require companies confirm that they are being formed for a lawful purpose at incorporation, with an annual confirmation of that continued lawful purpose.
• Require companies to provide a registered email address and an appropriate registered office address. Stop the use of PO boxes (and equivalent services) as an appropriate registered office address by the end of March 2025. Act against companies that do not have an appropriate office address or that use an address that has been hijacked.
• Develop significant changes to CH systems and service integrations necessary for identity verification. Have the technical capability to verify an individual's identity by the end of March 2025. Under ECCTA , unless they are exempt) identity verification will need to be carried out on:
  • All new and existing directors of a company;
  • All new and existing members of a Limited Liability Partnership;
  • All new and existing general partners of limited partnerships;
  • All new and existing persons with significant control of a company and registerable relevant officers of relevant registerable legal entities; and
  • Any company or individual who will be delivering documentation to CH on behalf of a third party, such as an Authorised Corporate Service Provider.

Where? The ECCTA extends to England and Wales, Scotland and Northern Ireland, subject to subsections (2) and (3). Sections 194 and 195 extend to England and Wales only.