With 2025 approaching, businesses in the UK must stay informed about upcoming changes to employment law, particularly around leave entitlement and working time regulations. These adjustments will impact both employers and employees, making it essential to prepare in advance. In this blog, we’ll break down the key changes and what they mean for your organisation.

Key Changes to UK Leave & Working Time Laws in 2025

1. Changes to Holiday Pay Calculations

For businesses that employ part-year and irregular-hours workers, a crucial update is the introduction of a 52-week holiday pay reference period. This means that holiday entitlement will now be calculated using an average of earnings over the previous 52 weeks, rather than using fixed calculations that may not accurately reflect actual working patterns. Employers should review their payroll processes to ensure compliance with the new approach.

2. Rolled-Up Holiday Pay Returns

A major change in 2025 is the reintroduction of rolled-up holiday pay, which allows employers to include an employee’s holiday pay in their regular wages rather than paying it separately when leave is taken. This will simplify holiday pay calculations for businesses employing workers with irregular hours. However, it remains essential to ensure that employees take their statutory leave to maintain well-being and compliance with regulations.

3. Record-Keeping Requirements for Working Time

Employers are still required to maintain accurate records of working hours to ensure compliance with the Working Time Regulations. However, in 2025, there will be greater flexibility regarding how businesses keep track of working hours. This should help reduce administrative burdens while ensuring employers remain compliant with maximum weekly working hours, rest breaks, and annual leave entitlements.

4. Family-Friendly Leave Updates

There are expected enhancements to family-friendly leave entitlements, particularly around parental leave and carer’s leave. The government is reviewing policies to improve work-life balance, and businesses should stay updated to ensure their leave policies align with any new legal requirements.

What Employers Need to Do

To ensure compliance with these changes, employers should:

• Review and update leave policies to reflect the new holiday pay calculation method.
• Consider whether rolled-up holiday pay is a suitable option for their workforce.
• Ensure working time record-keeping practices align with the new flexibility guidelines.
• Stay informed about upcoming family-friendly leave changes and adjust policies accordingly.

How Leave Planner Can Help

Navigating these employment law changes can be challenging, but Leave Planner simplifies the process. Our intuitive leave management software ensures that your business remains compliant with evolving regulations, offering accurate tracking of holiday entitlement, working hours, and absence trends.

For more information on how Leave Planner can support your business, get in touch with us today! Call Steve on 01252 636 070 or email support@leaveplanner.com.