✅ Key changes now live
| Change |
Update |
| Employment National Insurance rate |
Increased from 13.8% to 15% |
| Class 1 NI threshold |
Reduced from £9,100 to £5,000 per year |
| National Living Wage |
Increased from £12.21/hour to £12.71/hour |
| National Minimum Wage |
Increased from £10/hour to £10.85/hour |
| Income tax thresholds |
Frozen until 2028 |
| Employment Allowance |
Increased from £5,000 to £10,500 |
| Employment Allowance cap |
£100,000 cap to be removed |
Automatic right to request flexible working from day one
Effective from 6 April 2024:
As of April 2024, all employees have a statutory right to request flexible working from day one in the role, instead of waiting six months (26 weeks). Employers must handle requests reasonably, consult with the employee, and respond within two months. They can still refuse, but only for one of the recognised business reasons – and they should be ready to explain their decision clearly.
The change is designed to make flexible working feel more like the norm than a perk, and it sits alongside a wider programme of reforms that are expected to keep pushing work–life balance up the agenda over the next few years.
Effective from 2027:
From 2027, further changes will strengthen flexible working rights, including:
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Employers will have to hold a consultation meeting with employees to discuss flexible working requests before they can reject them.
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When rejecting a request, it won't be enough to just give one of the eight business reasons, employers must also prove that it's reasonable to refuse on those grounds. The explanation must be provided in writing.
Enhanced redundancy protections for pregnant employees and new parents
Effective from 6 April 2024:
Pregnant employees and certain new parents have an extended period of protection in a redundancy situation. This runs from when an employee tells their employer they’re pregnant or starts maternity, adoption or shared parental leave, through that leave and for up to around 18 months from the child’s birth or placement.
During this protected period, if there is a suitable alternative vacancy, it must be offered to them as a priority before other employees at risk of redundancy.
The Employment Rights Act also confirms stronger dismissal protections for pregnant women and new mothers on top of these redundancy rules. A commencement date is yet to be confirmed but the changes are expected in 2027.
New sexual harassment and harassment duties for employers
Effective from October 2024:
Since October 2024, all employers have been required to take reasonable steps to prevent sexual harassment in the workplace. This includes:
Although these duties apply employers of all sizes, growing SMEs in particular should see these steps as best practice for building a respectful, inclusive and legally compliant workplace
Effective from 1 October 2026:
From 1 October 2026, sexual harassment duties for employers increase again.
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Employers will be required to take all reasonable steps, rather than just reasonable steps to prevent sexual harassment. It won't be enough to just have a policy and respond when something goes wrong. Employers will need to be able to show they've actively anticipated risks, planned for them and taken practical steps to prevent sexual harassment before it happens.
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Employers will also become directly liable if a worker is harassed by a third party where the employer hasn't taken all reasonable steps to prevent it. This includes any type of harassment (not just sex) from customers, clients, contractors or patients. This change means thinking beyond your own team and taking steps to manage risks from public-facing interactions too.
Employers must keep adequate holiday records and holiday pay records for six years
Effective from 6 April 2026:
After 6 April 2026, employers have a legal duty to keep adequate records for holiday and holiday pay for up to six years.
This requirement will be monitored by the Fair Work Agency (more details below).
Expanded leave entitlements from day one
Effective from 6 April 2026:
Under the Employment Rights Act, employees will have day-one access to key types of family leave, including paternity leave, unpaid parental leave and a new right to bereavement leave. The aim is to make it easier for people to balance work and family life from their very first day in the role.
Currently, statutory parental bereavement leave gives eligible parents up to two weeks’ leave, paid at £187.18 per week (from April 2025) or 90% of average weekly earnings, whichever is lower.
From 6 April 2026, this pay rate increases from £194.32 per week. From this date, the Employment Rights Act also gives employees the day-one right to unpaid bereavement leave for a wider range of losses – including some relationships and pregnancy losses that aren’t currently covered.
Statutory sick pay (SSP) reforms
Effective from 6 April 2026:
These changes are designed to extend sick pay protection to around 1.3 million lower-paid workers. Employers should prepare for higher sickness absence costs and update their policies and payroll processes.
*Keep in mind that the Lower Earnings Limit will still apply to other statutory payments like Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay and Statutory Adoption Pay.
Whistleblowing protections
Effective from 6 April 2026:
From 6 April 2026, reporting sexual harassment at work is formally classified as a qualifying disclosure under whistleblowing law. This is a significant shift - previously, sexual harassment complaints were typically handled through grievance procedures, but they didn't carry the same whistleblowing protections.
From this date:
These changes apply to all workers, including contractors and agency workers.
What this means in practice is that employers need to review their whistleblowing policies to make sure they explicitly reference sexual harassment as a category of qualifying disclosure. They should also make clear that NDAs can't be used to prevent protected disclosures.
Breathe makes it easy to store and share your policies in one secure place, so everyone knows exactly where to find them.
Collective redundancy protective award increase
Effective from 6 April 2026:
If you're making 20 or more redundancies at one site within a 90-day period and don't follow the proper collective consultation process, you already face a significant financial penalty. From 6 April 2026, that penalty doubles.
This means the maximum protective award increases from 90 days' pay per employee to 180 days' pay per employee.
The Fair Work Agency
Effective from 7 April 2026:
From 7 April 2026, a new government body called the Fair Work Agency will be responsible for making sure businesses are complying with employment law, focusing at first on everyday basics like pay, holiday, sick pay, fair treatment and record-keeping.
It can inspect workplaces without prior complaints, demand documents, issue Notices of Underpayment (recovering up to six years’ arrears plus penalties of up to 200% per underpayment), publicly name non-compliant employers, take tribunal cases on behalf of workers, impose legally binding orders to change practices, and recover its own enforcement costs.
Employers should:
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Review pay and holiday calculations
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Tighten HR and payroll records
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Update contracts and policies
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Clarify that staff know how to raise concerns
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Check agency/umbrella arrangements
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Brief managers on what the FWA is and what it looks for.
For more information on the Fair Work Agency, read our blog. And to find out if your business is prepared, take our free quiz.
Clampdown on fire and rehire practices
Effective from 1 October 2026:
From 1 October 2026, the Employment Rights Act introduces a new category of automatic unfair dismissal covering most 'fire and rehire' situations. In practice, it will usually be automatically unfair to dismiss an employee for refusing changes to core terms – such as pay, pensions, working hours, shift patterns or time off – unless the change is genuinely unavoidable due to serious financial difficulties.
Employers will still be able to make legitimate changes, but the bar will be higher. SMEs will need clear business reasons and a well-documented process, including consultation with staff, exploring alternatives and communicating openly about any proposed contract changes.
Right to join a Trade Union in contracts
Effective from 1 October 2026:
From 1 October 2026, under the Employment Rights Act, employers will be required to make it clear in employment contracts that employees have the right to join a trade union.
This is designed to improve transparency around union membership and give workers more confidence to join and take part in union activity if they choose to.
Changes to tipping law
Effective from 1 October 2026:
From 1 October 2026, employers will no longer be able to create or change a tipping policy without consulting their workers. While this used to be encouraged, it is becoming a requirement under the Employment Rights Act.
The Act will also enforce a three-year review cycle, meaning that tipping policies must be reviewed at least every three years. Workers must be consulted during the review and be given a summary of the consultation.
If employers do not comply with these requirements, workers will be able to make a claim to an employment tribunal.
Increased employment tribunal time limits
Effective from 1 October 2026:
From 1 October 2026, employees will have six months to bring claims to employment tribunals, rather than only three.
For employers, this means disputes you thought had been resolved could resurface further down the line, making diligent, consistent record-keeping more important than ever.
Six-month qualifying period for unfair dismissal
Effective from 1 January 2027
The government has stepped back from its earlier plan to make unfair dismissal protection a day-one right. Instead, the current two-year qualifying period for unfair dismissal is being reduced to six months.
This means more employees gain unfair dismissal protection earlier in their employment, so it’s a good idea for employers to keep an eye on how they manage probation, feedback and documentation during those first six months.
Bereavement leave reform timeline
Expected in 2027:
The Employment Rights Act introduces a new day-one right to at least one week of unpaid bereavement leave for employees who experience the loss of a loved one, including pregnancy loss before 24 weeks.
The official roadmap indicates that the new entitlement is expected to take effect in 2027, using the usual common commencement dates of 6 April or 1 October. Until then, employers should keep an eye on government and Acas updates and start reviewing internal policies, procedures and manager guidance so they can update them quickly once the final rules and start date are confirmed.
Zero-hours contracts
Scheduled for 2027:
The Employment Rights Act has confirmed that:
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If a worker consistently works set hours over a 12-week period, employers will need to offer them a contract that reflects that. The employee will be able to choose to stay on zero-hours terms - but the offer has to be made.
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Employers must give workers reasonable notice of shifts and provide compensation for any shifts that are cancelled or reduced at short notice.
These changes are expected to come into force in 2027 and will also apply to low-hours and agency workers.
For a full breakdown of these changes and what you need to do, take a look at our zero-hours contracts guide.
Gender pay gap reporting and menopause action plans
Expected Spring 2027 for businesses with 250+ employees:
Large employers will face tougher reporting requirements including:
These steps are part of a wider movement toward workplace equality and inclusivity, with gender pay gap reporting and menopause action plans fast becoming everyday expectations.
It's also best practice for all organisations to review and prepare for these measures, especially those in a growth phase, as early adoption can support long-term equity and sustainability.
Ethnicity and disability pay gap reporting
Expected in 2027 for businesses with 250+ employees:
Pay gap reporting is expected to extend to ethnicity and disability in a similar way to gender pay gap requirements for businesses with over 250 employees as part of the draft Equality (Race and Disability) Bill.
The bill is also likely to extend equal pay rights to protect workers from experiencing discrimination.
What these changes mean for employers
To stay compliant, employers will need to review and update:
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Employment contracts and onboarding documentation, including pay, responsibilities, and employee benefits
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Internal training and communication plans
With phased changes throughout 2026 and 2027, now is the time to audit and future-proof your policies.
These reforms place a greater emphasis on proactive compliance, making regular audits and policy updates essential.