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If you run a small business, chances are you've got more on your plate than keeping up with the Employment Rights Act 2025 and every legal change the government announces. But some of the changes that landed on 6 and 7 April are worth stopping for.
Some introduce brand new employment rights. Others tighten how existing rules are enforced. And one brings a whole new government body into the picture.
Together, these employment law changes raise the bar on what's expected from employers, particularly around the everyday basics: pay, leave, records and policies. The kind of stuff that's easy to let slip when you're busy, and much harder to fix in a hurry.
Here's what's changed and what to do about it.
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1. The Fair Work Agency - a new government body is watching the basics
The Fair Work Agency (FWA) was established on 7 April 2026 to enforce employment laws in the UK. It's a new government body responsible for protecting workers and employment rights, especially the everyday stuff like pay, holiday, sick pay, fair treatment and record-keeping.
It brings together three separate, existing enforcement bodies, and it has proper teeth.
The FWA can:
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Inspect workplaces without a prior complaint
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Demand documents
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Issue Notices of Underpayment recovering up to six years' arrears plus penalties of up to 200%
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Publicly name non-compliant employers
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Take tribunal cases on behalf of workers
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Recover its own enforcement costs
What you need to do
The areas the FWA are looking at (contracts, policies, holiday, pay and records) are exactly the bits that tend to slip when you're busy. And that's where the real risk sits for most SMEs.
Think of the launch of the Fair Work Agency as a prompt to get your house in order.
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Review your contracts, policies, pay, calculations and records. Make sure everything is accurate, up-to-date and easy to find.
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It'd also be a good idea to brief managers across the business on what the FWA is, what it looks for and what good record-keeping looks like in practice.
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If you work with agency workers, umbrella companies or labour providers, it's also worth checking that written agreements are in place and that they're meeting minimum pay and holiday requirements too.
Take our free, 5-minute FWA readiness quiz to see how prepared you are.
2. Pay rates have gone up
From April 2026, the National Living Wage has increased from £12.21 to £12.71 per hour (a 4.1% increase), and the National Minimum Wage increased from £10 to £10.85 per hour (an 8.5% increase).
This means that for all employees 21 and over, you'll need to be paying them at least £12.71 per hour. And for employees aged between 18 and 20, you'll need to be paying them a minimum of £10.85 per hour.
The rates have increased for under 18s and apprentices who are under 19 or in their first year too. You'll now need to pay these employees £8.00 per hour, up from £7.55 (roughly a 6% increase).
Employment Allowance remains the same at £10,500 but the Lower Earnings Limit has increased for statutory payments (other than Statutory Sick Pay) from £125 to £129 per week. This means that your employees must now earn at least £129 per week to qualify for National Insurance (NI) benefits, such as the State Pension, without actually paying any NI contributions.
If you need help calculating national insurance contributions, try our free national insurance contributions calculator.
What you need to do
Small miscalculations can add up fast, and with the Fair Work Agency now watching, getting this right matters more than ever.
Run a payroll check to make sure everyone's being paid on or above the correct rate, factoring in unpaid time, deductions and uniform costs.
It's also worth making sure the way you manage payroll is synced up with your employee records. When pay data and people data live in separate systems, mistakes are harder to spot and slower to fix. Using HR software with a payroll integration keeps everything connected, so changes are reflected in one place and nothing slips through the cracks.
3. Statutory Sick Pay now starts from day one
As of 6 April 2026, Statutory Sick Pay (SSP) is payable from the first day of sickness absence. The previous three-day waiting period has been removed.
The Lower Earnings Limit no longer applies to SSP either, so there's no minimum earnings threshold for employees to qualify. SSP is now £123.25 per week, or 80% of average weekly earnings, whichever is lower.
In practice, that means if someone on your team calls in sick on a Monday, you're paying SSP from that same day, not from Thursday. These changes extend sick pay protection to around 1.3 million lower-paid workers.
What you need to do
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Update your payroll system so SSP kicks in from day one, not day four.
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Review your sickness absence policy to make sure it reflects the removal of the waiting period and the Lower Earnings Limit.
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Make sure managers know the rules have changed, so they're not giving out-of-date advice to their teams.
You can use our fee SSP calculator to make things easier.
4. You need to keep holiday records for up to six years
As of 6 April 2026, employers have a new legal duty to keep adequate holiday and holiday pay records for up to six years.
This means you need to keep hold of and be able to easily find and access records of every employee's holiday and holiday pay up to six years in the past.
This becomes even more important with the introduction of the Fair Work Agency.
What you need to do
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Make sure your holiday and holiday pay records are accurate, organised and stored securely.
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Check you've got records going back as far as you can.
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Set up a system where you can keep records for six years or more and easily access them.
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If records are scattered across paper files, documents and email threads, bringing them into one place will help.
5. Paternity leave and unpaid parental leave are now day-one rights
As of 6 April 2026, employees no longer need to have been with you for a set period before they can access paternity leave or unpaid parental leave. Both are now available from their very first day in the role.
So if you hire someone and their partner is due the following week, they're entitled to paternity leave straight away. That's a big shift from how things used to work.
Our free paternity leave calculator is up-to-date and ready for you to use to calculate leave entitlement for your employees here.
Take note - while eligible employees are now entitled to paternity leave from the first day of employment, that doesn't mean they're automatically entitled to Statutory Paternity Pay entitlements from day-one. They must still earn at least £129 per week (the Lower Earnings Limit) and have 26 weeks of continuous service by the 15th week before the baby is due.
A new statutory leave type called Bereaved Partner's Paternity Leave is also now in force. It was created to fill a specific legal gap for fathers and partners whose partner (the child's mother or primary adopter) dies within the first year of a child's birth or adoption.
This means that eligible employees can now take up to 52 weeks leave in a single block and this leave is also a day-one right.
What you need to do
Remove any length-of-service requirements for paternity leave and unpaid parental leave from your policies and contracts. Update your onboarding materials so new starters know what they're entitled to from day one.
If you're using HR software, make sure that your leave settings allow employees to request paternity leave and unpaid parental leave from the first day of their employment.
Make sure your leave policies now also reference Bereaved Partner's Paternity Leave as a separate statutory entitlement, including the right to up to 52 weeks' leave in a single block with no length-of-service requirement.
These are deeply sensitive situations, so brief your managers not just on the entitlement itself, but on how to handle the conversation with care and support employees.
6. Bereavement leave has changed in Northern Ireland
In Northern Ireland, separate legislation means that Statutory Bereavement Leave now applies to miscarriages and early pregnancy loss before 24 weeks, in addition to the death of a child under 18 or a stillborn after 24 weeks of pregnancy.
This change (plus other expansions to bereavement leave) are expected to take effect in Great Britain in 2027. They strengthen protections for pregnant workers who experience a loss.
What you need to do
If you have employees in Northern Ireland, update your bereavement leave policies to reflect the new coverage for miscarriage and early pregnancy loss before 24 weeks.
For businesses in Great Britain, it's worth keeping this on your radar now so you're ready when similar changes come into force in 2027.
7. Whistleblowing protections now cover sexual harassment
As of 6 April 2026, reporting sexual harassment at work is formally classified as a qualifying disclosure under whistleblowing law.
That means workers who report sexual harassment are now protected from detriment and unfair dismissal in the same way as any other whistleblower. And, any non-disclosure agreements (NDAs) or confidentiality clauses that try to prevent someone from making this kind of disclosure are automatically void.
Workers can also now apply for interim relief at an employment tribunal, meaning the tribunal can order you to maintain the individual's employment and continue paying them while the case is ongoing.
What you need to do
Update your whistleblowing policy to make it clear that employees who report sexual harassment are legally protected under whistleblowing law and that NDAs can't prevent protected sexual harassment disclosures.
Make sure the policy is easy to find, whether that's in your handbook, on your intranet or in your HR system. And brief your managers so they know how to handle a disclosure properly if one comes their way.
8. Redundancy pay caps and protective awards for collective redundancies have increased
For the 2026/2027 tax year, the weekly statutory pay cap for redundancies has increased to £751 per week (up from £719) in Great Britain and £783 per week (up from £749) in Northern Ireland.
This means that the maximum amount of statutory redundancy pay an eligible employee can receive is now £22,530 in Great Britain, and £23,490 in Northern Ireland.
Additionally, as of 6 April 2026, the maximum protective award for failing to follow proper collective consultation processes during a collective redundancy has doubled. Instead of the maximum penalty being 90 days' pay per per employee, it's now 180 days' pay per employee.
If you need help calculating redundancy payments, try our free redundancy calculator.
What you need to do
If you're planning or anticipating any redundancies, make sure you understand the collective consultation rules and follow them properly. Employees can bring a claim to an employment tribunal if consultation isn't handled properly.
Document everything and update your redundancy pay calculations to reflect the new weekly cap.
If you're unsure about anything in the redundancy process, speak to an employment law adviser. The cost of getting it wrong has just doubled.
Our redundancy toolkit, created in partnership with employment law experts at Clover HR, can help you makes sure you're following the correct process step by step. It's a free, practical resource designed to guide small-to-medium sized businesses through redundancies the right way.
9. New requirements for gender pay gap and menopause action plans
Employers of all sizes are now encouraged to publish menopause action plans and report on the gender pay gap in their organisation.
Equality action plans should include steps to address the pay gaps, support employees experiencing menopause, and improve transparency around how your business is tackling these issues.
For now, this is voluntary. But mandatory requirements for employers with 250 or more workers are expected to follow in 2027.
The government has published guidance on new requirements for employers to create and publish gender equality action plans, which must include steps to address the gender pay gap and support employees experiencing menopause. You can find it here.
What you need to do
While most SMEs aren't legally required to publish action plans just yet, it's worth thinking about now, especially if you're growing.
Even without a legal obligation, being proactive about the gender pay gap and menopause support sends a strong message to your team. It shows you care about fairness and that you're willing to act on it, not just talk about it.
Consider putting together a simple action plan that looks at pay gaps and menopause support in your business. It doesn't need to be complex. Start with what you already know: are there gaps in how men and women are paid at similar levels? Do your managers know how to have a supportive conversation with someone experiencing menopause?
If you decide to publish your action plan, make sure it's honest, specific and grounded in real actions rather than vague commitments. And keep an eye on the 2027 timeline, because if you're approaching 250 employees, this will become a legal requirement sooner than you think.
Your April 2026 employment law changes checklist
If you've read through each of the employment law changes above, you'll already have a good sense of what needs doing. But here's a quick checklist so that you have everything in one place and know exactly what steps you need to take.
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Check your pay rates: Make sure everyone's being paid at or above the new National Minimum Wage and National Living Wage rates.
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Review your statutory pay calculations: Check everyone's being paid the correct amounts for holiday pay, Statutory Sick Pay and any other statutory payments.
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Get your records in order: Wages, hours and holiday records should be accurate, easy to find and stored securely for up to six years.
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Update employment contracts: Every employee should have a written contract or statement of terms that reflects how they actually work and are paid.
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Review your written policies: Holiday, leave, sickness, working time, whistleblowing, and agency worker policies should all be up to date.
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Make sure you have a process for raising concerns: You should have a formal process in place and your team should know how to raise concerns about pay, holiday or treatment.
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Check agency and umbrella worker arrangements: Make sure written agreements are in place and that they're meeting minimum requirements.
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Brief your managers: Make sure they understand the new rules and what good record-keeping looks like. You should also inform workers of their rights.
As an overarching rule - imagine someone from the Fair Work Agency knocks on your door tomorrow. Could you show them your holiday records from the last six years? Could you prove everyone's on the right pay rate? Could you pull up an employment contract for every member of your team?
Remember you can take our free 5 minute quiz here to see how prepared you are and what practical steps you need to take.
And don't forget, these aren't the last employment law changes heading your way. More updates are coming in October 2026, January 2027 and throughout the rest of 2027, including changes to unfair dismissal protections, flexible working requests, and zero-hour contracts.
Head over to our Employment Law Hub to stay up-to-date with everything that's changing and what it means for your business.
How to get (and stay) on top of UK employment law changes
Most compliance problems don't come from big, obvious mistakes. They come from the small, everyday stuff: holiday calculations using outdated numbers, contracts that haven't been updated in years, or HR records spread across filing cabinets and inboxes.
If your HR admin is in that kind of shape, now's a good time to bring it together. Breathe keeps contracts, policies, holiday, sickness and employment records organised in one place, making it easier to stay on top of the basics and show your working if questions ever arise.
Try Breathe for free for 14 days - no strings attached.
Or, download our guide to HR software for small-to-medium businesses to discover everything you need to know in order to choose an HR software platform that will help your organisation meet stay compliant with all the changes in the Employment Rights Act.
Additional UK employment law FAQs
What is the Employment Rights Act 2025?
The Employment Rights Act 2025 became law on 18 December 2025, receiving royal assent from Parliament. It introduces significant changes to UK employment law, with most taking effect across 2026 and 2027.
The April 2026 employment law changes covered in this blog are part of this Act, which is aimed at enhancing worker protections and compliance with employment rights across the UK.
Could I face criminal consequences for not keeping holiday records?
Yes. It's worth taking this seriously. The requirement to keep adequate holiday and holiday pay records for up to six years is now a legal duty, and failure to do so could potentially lead to a criminal offence. The Fair Work Agency will be looking at whether employers are keeping proper records as part of its enforcement activity.
What's happening with industrial action protections?
As of 18 February 2026, dismissing someone for participating in industrial action is now considered "automatically unfair", with the previous 12-week limit for claims removed. From October 2026, new protections will also safeguard workers against detriment from their employers for taking part in industrial action.
Is protection from unfair dismissal becoming a day-one right?
No. Protection from unfair dismissal is not going to become a day one right. But from 1 January 2027, the qualifying period for unfair dismissal will be reduced from two years to six months.
This means more employees gain unfair dismissal protection earlier in their employment.
The cap on unfair dismissal compensation will also be removed on 1 January 2027, increasing financial exposure for businesses.
So, it’ll be even more important for employers to keep an eye on how they manage probation, feedback and documentation during the first six months of employment.
On top of this, dismissing someone and rehiring them on worse terms (sometimes called "fire and rehire") will be classified as automatically unfair dismissal from 1 January 2027.
This is a big change in employment law and one worth preparing for now, even though it doesn't take effect until next year.
Are there changes to how long employees have to bring an employment tribunal claim?
Yes. From October 2026, the time limit to bring an employment tribunal claim will increase from three months to six months.
This gives workers more time to raise issues, which means businesses need to make sure their records and processes are in good shape well beyond the point someone leaves.
What's changing for zero-hours contracts?
New rights for people on zero-hours contracts and low-hours contracts are expected to come into force in 2027. These will be things like guaranteed working hours and compensation for shifts cancelled at short notice. This includes a change in law so that employers will need to give reasonable notice of shift changes.
If your business uses zero-hours contracts, it's worth keeping an eye on these changes so you've got time to review your arrangements before the new rules land.
Our free zero-hours contracts guide is here to help.
Are flexible working requests changing?
In 2027, new rules will require that rejections of flexible working requests must be "reasonable" and based on specified reasons. While the exact date hasn't been confirmed, this is part of the broader set of employment rights changes expected in coming months.
How is the duty to prevent sexual harassment changing?
Whistleblowing law has changed and sexual harassment now counts as a qualifying disclosure. But there are more changes on the way. After October 2026, employers will
If you don't already have clear policies and training in place to support employees and prevent sexual harassment, now's the time to put them in place.
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