Employment Law Changes in 2026: A Complete Guide for UK Employers
Wondering what employment law changes have already happened in 2026? Here’s everything UK employers need to know so far.
The Employment Rights Act 2025 represents the biggest overhaul of UK employment law in decades. However, despite the headlines, many of the most talked-about reforms have not yet taken effect.
Instead, the Government is introducing the changes in stages throughout 2026 and 2027, giving businesses time to prepare. That means it’s more important than ever for employers to understand which changes are already law, which are coming later, and what practical steps they should be taking now.
Whether you employ five people or fifty, staying ahead of these changes will help you remain compliant, reduce legal risk and build stronger workplace practices.
In This Guide
- Employment law changes already in force in 2026
- What each change means for employers
- Practical steps businesses should take
- Employment law changes still to come
- Frequently asked questions
Employment Law Changes Already in Force in 2026
Statutory Sick Pay Has Changed
One of the most significant changes introduced this year affects Statutory Sick Pay (SSP).
From 6 April 2026, eligible employees can receive SSP from the first day of sickness absence, rather than waiting until the fourth day.
The Government has also removed the Lower Earnings Limit, meaning many lower-paid workers who previously didn’t qualify for SSP are now entitled to receive it. Eligible employees receive either the statutory weekly rate or 80% of their normal weekly earnings (whichever is lower).
Why this matters for employers
This change is expected to increase the number of employees eligible for SSP while also increasing the cost of short-term sickness absence.
Many SMEs will need to review how they manage attendance and short-term absence, particularly where frequent one or two-day absences occur.
What employers should do
- Review your sickness absence policy.
- Ensure payroll software reflects the new SSP rules.
- Train managers on reporting sickness correctly.
- Consider whether your absence trigger points remain appropriate.
Day One Rights for Paternity Leave and Unpaid Parental Leave
Another important reform is the extension of certain family-friendly rights.
From 6 April 2026, eligible employees no longer need a qualifying period of service before becoming entitled to:
- Statutory Paternity Leave
- Unpaid Parental Leave
These rights now apply from the first day of employment, making it easier for employees to access family leave shortly after joining an organisation.
What employers should do
Businesses should:
- Update family leave policies.
- Ensure employment contracts reference current legislation.
- Train managers so they understand that length of service is no longer a deciding factor.
The Fair Work Agency Has Been Launched
On 7 April 2026, the Government officially established the Fair Work Agency.
The Agency brings together several employment rights enforcement bodies into one organisation with responsibility for enforcing areas including:
- National Minimum Wage
- Holiday pay
- Statutory Sick Pay
- Modern slavery offences
- Employment agency standards
The Agency also has wider investigative powers and is expected to play an increasingly proactive role in enforcing employment rights.
Why this matters
For compliant employers, little should change day to day.
However, businesses should expect greater scrutiny where employment rights are not being met.
Good record keeping and robust HR documentation are becoming increasingly important.
Holiday Records Must Be Kept for Six Years
A change that has received far less publicity but could have significant implications is the new requirement to maintain holiday records.
Employers must now keep records relating to annual leave and holiday pay for at least six years.
For businesses still relying on spreadsheets or manual records, now may be the time to consider a digital HR system that provides an accurate audit trail.
Stronger Protection for Whistleblowers
The Employment Rights Act has also strengthened whistleblowing protection.
From April 2026, disclosures relating to sexual harassment are now specifically recognised under whistleblowing legislation, giving employees additional legal protection if they raise concerns.
This reinforces the importance of:
- clear reporting procedures;
- effective investigations; and
- a workplace culture where employees feel safe to speak up.
Increased Compensation for Collective Redundancy Failures
Businesses undertaking large-scale redundancies should also be aware that the maximum protective award available where employers fail to meet collective consultation obligations has doubled.
Although many SMEs employing fewer than 50 staff may never trigger collective consultation requirements, businesses experiencing growth, acquisitions or restructuring should understand the increased financial exposure.
Annual Statutory Rate Increases
As with every April, statutory employment payments increased, including:
- National Living Wage
- National Minimum Wage
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Adoption Pay
- Statutory Shared Parental Pay
- Statutory Sick Pay
- Employment tribunal compensation limits
- Statutory redundancy pay limits
Employers should ensure payroll systems and budgets reflect the latest rates.
Employment Law Changes Still to Come
Many employers mistakenly believe the biggest Employment Rights Act reforms have already happened.
In reality, several headline changes are still to come during late 2026 and 2027, including:
- enhanced duties to prevent workplace sexual harassment;
- restrictions on “fire and rehire” practices;
- extended employment tribunal time limits;
- reforms to zero-hours contracts and guaranteed hours;
- reduction of the unfair dismissal qualifying period to six months;
- further reforms to flexible working and bereavement leave.
This means employers still have valuable time to prepare.
How SMEs Should Prepare
Rather than waiting for each reform to arrive, proactive businesses are already reviewing their HR documentation and employment practices.
We recommend that employers:
- Review contracts of employment.
- Update employee handbooks.
- Check HR policies reflect current legislation.
- Review sickness absence procedures.
- Audit family leave policies.
- Ensure managers receive up-to-date employment law training.
- Introduce structured probation and performance review processes.
- Consider implementing an HR system to improve compliance and record keeping.
Preparing early reduces risk, avoids last-minute changes and makes future legislative updates much easier to implement.
Frequently Asked Questions
What is the biggest employment law change in 2026?
For many employers, the expansion of Statutory Sick Pay is the most significant immediate change, alongside the introduction of day-one family leave rights and the creation of the Fair Work Agency.
Has day-one unfair dismissal already started?
No. Despite widespread discussion, this reform has not yet taken effect. The Government’s current implementation timeline indicates that changes to unfair dismissal qualifying periods are expected from January 2027, subject to the necessary legislation. However, whilst the unfair dismissal qualifying period isn’t due to change until January 2027, this will be backdated and therefore new hires joining from this month onwards will qualify from 1st January onwards.
Do small businesses need to comply with these changes?
Yes. Most employment law changes apply regardless of business size, although some obligations (such as mandatory gender pay gap reporting) continue to apply only to larger employers.
Need Support Preparing for the Employment Rights Act?
With employment law evolving faster than ever, keeping policies, contracts and procedures up to date can be challenging – especially for busy SME owners.
At Norton Loxley, we help businesses navigate employment law changes with practical, commercially focused HR advice. Whether you need an HR audit, updated documentation, manager training or ongoing outsourced HR support, we’re here to help.
Get in touch with our team today to ensure your business is ready for the next phase of employment law reform.
