If you’re running an SME, 2026 is shaping up to be one of the busiest years for employment law changes in a generation. The Employment Rights Act 2025 became law in December, and its provisions are being rolled out in several phases throughout the year. Here’s what you need to know about the changes coming in April and October, and how to prepare your business.
April 2026: The first wave
Day-one family rights
One of the most significant changes taking effect on 6 April 2026 concerns family leave entitlements. Paternity leave and unpaid parental leave will become day-one rights, meaning employees won’t need to have worked for you for 26 weeks or a year, respectively, to access these benefits.
This applies to babies born on or after 6 April 2026, or to adoptions starting from that date. Although statutory paternity pay still requires some service, removing barriers to taking leave is a major shift.
What this means for you: Review your family leave policies and update your employee handbooks. Ensure your payroll systems can accommodate these new entitlements from day one of employment.
Example: A construction firm with 15 employees appoints a new site manager in March 2026. His partner is due in May. Under the old rules, he wouldn’t qualify for paternity leave until he’d completed 26 weeks’ service. From April 2026, he’s entitled to take paternity leave from day one. If the business isn’t prepared for this, and hasn’t updated its contracts or payroll processes, it could face an unlawful detriment claim if the request is refused or mishandled.
Statutory Sick Pay reform
From April, Statutory Sick Pay (SSP) will be available from the first day of sickness, and the Lower Earnings Limit will be scrapped. This means all eligible employees will qualify for SSP, regardless of their earnings.
The weekly rate is expected to increase to £123.25, or 80% of an employee’s normal weekly earnings for lower earners, whichever is lower.
What this means for you: If you currently apply ‘waiting days’ before SSP begins, you’ll need to amend your absence policies immediately. Budget for potential increases in sick pay costs, particularly if you employ part-time or lower-paid workers.
Fair Work Agency launches
In April, the Fair Work Agency will be established, consolidating existing enforcement bodies and strengthening compliance monitoring. The agency will initially focus on enforcing holiday pay and the National Minimum Wage.
What this means for you: Now is the time to conduct a thorough compliance audit. Ensure you’re calculating holiday pay correctly, that all workers are using their entitlement, and that your systems for checking minimum wage compliance are robust.
Example: A hospitality business with 18 employees has historically calculated holiday pay based solely on basic salary, excluding tips and irregular overtime. This is a common but unlawful practice. With the Fair Work Agency now actively investigating holiday pay compliance, a complaint from even one employee could trigger a wider audit. Backdated holiday pay claims covering up to two years could amount to thousands of pounds, plus the cost of management time and reputational damage. A compliance review now could identify and correct the issue before it becomes a problem.
Whistleblowing protection extended
From 6 April, sexual harassment will be added to the list of issues that can form the basis of a protected whistleblowing disclosure. This means that workers who report sexual harassment will have additional protection from detriment or dismissal.
What this means for you: Update your whistleblowing policies and ensure managers understand this new protection. Consider refresher training on handling harassment complaints.
Collective Redundancy protection doubles
The maximum protective award for failing to consult properly about collective redundancies will double from 90 to 180 days’ pay.
What this means for you: If you’re considering any restructuring that could affect 20 or more employees, ensure your consultation processes are watertight. The financial risk of getting this wrong has doubled.
Example: A manufacturing business with 45 employees needs to make 22 redundancies due to the loss of a major contract. It begins the process without triggering the formal 45-day collective consultation period. Under the previous rules, a failure to consult could have resulted in a protective award of up to 90 days’ pay per employee, potentially exceeding £100,000 in total. From April 2026, that same mistake could cost more than £200,000. Getting the process right from the outset is not just good practice; it’s essential.
Annual increases
As usual, April brings the annual uprating of statutory payments and the National Minimum Wage:
National Living Wage (21+): £12.21 to £12.71
18–20 year olds: £10.00 to £10.85
Apprentices and 16–17 year olds: £7.55 to £8.00
Statutory Maternity Pay and related payments: expected to increase to £194.32 per week
October 2026: The Second Phase
‘Fire and Rehire’ restrictions – what’s changing
Originally planned for October 2026, the government has now confirmed that restrictions on ‘fire and rehire’ will take effect from 1 January 2027. Full details will be covered in our companion blog, Employment Law Changes 2027 and Beyond.
What this means for you: If you need to change employment terms, you’ll need to negotiate and obtain genuine agreement from employees. Ensure your contracts include effective variation clauses, and seek legal advice before making any changes to key terms such as pay, hours, or holidays.
Enhanced Harassment Prevention Duty
The duty to prevent sexual harassment, which became ‘reasonable steps’ in October 2024, will be strengthened from October 2026 to require employers to take ‘all reasonable steps’ to prevent sexual harassment. You’ll also become liable for harassment by third parties (customers, clients, suppliers) unless you’ve taken all reasonable steps to prevent it.
What this means for you: Conduct a thorough risk assessment of potential harassment scenarios in your workplace. Implement additional preventive measures, update policies, and ensure all staff receive appropriate training. Document all actions to demonstrate compliance.
Example: A 20-person events company regularly works with external clients and contractors at venues. A member of staff is harassed by a client representative during an event. From October 2026, if the business can’t demonstrate it took all reasonable steps to prevent third-party harassment, such as having a clear policy, briefing staff on how to report incidents, and communicating expectations to clients, it could face a tribunal claim with a 25% uplift on any award. Training and policy updates completed before October will provide the evidence needed to defend this position.
Trade Union rights expand
October brings several new obligations around trade unions:
You’ll need to inform workers of their right to join a trade union
Trade unions will gain new rights to access your workplace
Union equality representatives will have rights to time off and facilities
Workers taking industrial action will be protected from detriment
What this means for you: Develop processes to provide new starters with union information and to handle union access requests. If you have recognised unions, ensure you provide appropriate time off and facilities for representatives.
Example: A warehouse business with 35 employees has never formally engaged with trade unions and doesn’t currently include union information in its onboarding process. From October, failing to inform new starters of their right to join a union will breach the new rules. If a union then requests workplace access and is refused without good reason, the business could face enforcement action. Adding a short paragraph to offer letters and induction packs is a straightforward fix – but it must be in place before the deadline.
Employment Tribunal time limits extended
The time limit for bringing most employment tribunal claims will rise from three to six months.
What this means for you: This could involve dealing with claims about incidents from much further in the past, making evidence gathering more challenging. It may also increase the overall volume of tribunal claims, as employees have more time to bring them.
What should you do now?
With so many changes coming through, here’s a practical action plan:
Immediate priorities:
Review and update all family leave, sick pay, and absence policies
Audit your holiday pay and minimum wage compliance
Update whistleblowing policies
Budget for increased statutory payments
Review your risk assessments for harassment prevention
Before October:
Develop harassment prevention strategies and training programmes
Review any plans to change employee terms and seek advice early
Prepare trade union information processes
The changes coming in 2026 mark a significant shift in employment law, strengthening worker protections across several areas. While this may seem daunting, early preparation and expert guidance can help you navigate these changes smoothly and avoid costly mistakes.
If you need support preparing your business for these changes or advice on how they apply to your circumstances, get in touch with Humber HR People by emailing kate@humberhrpeople.co.uk. We’re here to help you stay compliant, protect your business, and support your team.
This blog provides general guidance based on the Employment Rights Act 2025 and government announcements current as of February 2026. The examples are illustrative only and do not constitute legal or financial advice. For specific advice in individual circumstances, contact Humber HR People
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