UK Employment Law Changes 2026: What Employers Need to Know

UK employment law is changing - and for small business owners, now is the time to make sure your contracts, policies, and internal processes protect your business and stay compliant.

At the heart of these changes is the Employment Rights Act 2025. It became law on 18 December 2025, after first being introduced as the Employment Rights Bill. The Act introduces a wide-ranging package of workplace reforms, but they won’t all take effect at once. Instead, the reforms are being introduced gradually across 2026 and 2027, with some key updates already in place from April 2026.

This guide focuses on the Employment Rights Act 2025 rollout, along with the April 2026 updates that matter most to small businesses. It explains what applies now, what’s still coming, and what your business should review to stay compliant.

What changed in April 2026?

April 2026 marked the first major stage in the rollout of the new reforms. While many of the more widely discussed changes are still to come, some important updates are already in force - particularly around Statutory Sick Pay, family leave rights, and statutory payment rates.

One of the most significant changes is to Statutory Sick Pay (SSP). From 6 April 2026, SSP became payable from the first full day of sickness absence. The old 3 waiting days were removed, and the previous earnings threshold barrier was also removed, meaning more lower-paid employees can now qualify. For the 2026-27 tax year, SSP is paid at £123.25 per week or 80% of average weekly earnings, whichever is lower.

For employers, that is more than a technical payroll update. It changes when sick leave starts to cost the business and can bring more employees within scope. If your payroll system, sickness policy or manager guidance still reflects the old approach, there is a real risk of applying the wrong entitlement without realising it.

April 2026 also brought changes to family-related leave rights. From 6 April 2026, paternity leave and ordinary parental leave became day-one rights. In practical terms, that means employees no longer need to complete a minimum period of service before becoming entitled to take that leave. Acas also notes that newly eligible employees could begin giving notice from 18 February 2026.

This is the kind of change that may not sound dramatic at first, but for smaller employers it can have a real operational impact. A new starter may now be able to request leave much earlier than many businesses expect. In a small team, that can affect staffing, scheduling and workload much more directly than it might in a larger organisation.

There is also an important legal distinction here: a day-one right to leave does not necessarily mean a day-one right to statutory pay. That is easy to miss, but it is exactly the sort of detail that can create confusion if policies are updated too broadly or managers rely on headlines rather than the actual rules.

In addition to those rights changes, statutory family pay rates also increased from April 2026. From 5 April 2026, the main statutory family pay rate rose to £194.32 per week, or 90% of average weekly earnings if lower. That rate applies to payments such as Statutory Paternity Pay, Shared Parental Pay, Parental Bereavement Pay, and Statutory Neonatal Care Pay, as well as the later paid weeks of maternity and adoption pay.

More broadly, April 2026 sits within a wider move towards stronger labour-market enforcement. That does not mean every employer is facing an immediate enforcement change overnight, but it does mean compliance, record-keeping and keeping policies current are becoming more important in the government’s overall reform programme.

Why do these changes matter for small businesses?

For many small businesses, the real challenge is not understanding that the law has changed. It is understanding how those changes show up in day-to-day operations.

A larger employer may have HR teams, payroll support and established internal systems to absorb these kinds of updates. Smaller businesses are less likely to have that buffer. In many cases, it is the founder, director or line manager dealing with a sick employee, a leave request or a policy question in real time.

That is why even relatively focused changes can have a bigger effect in a small business environment. A shift in when sick pay starts, or when a newer employee can take leave, may seem minor in legal terms, but in practice it affects staffing, cost and decision-making.

It also means that outdated documents can create problems quickly. If your contracts or policies no longer reflect the law, or if managers are still working from old assumptions, a simple employee request can turn into a compliance issue.

What has not changed yet?

This is one of the most important parts of the picture.

Although the Employment Rights Act 2025 has attracted a lot of attention, not all of its reforms are already in force. Many of the better-known changes employers have heard about are still due later in 2026 and 2027.

That includes further reforms around sexual harassment, third-party harassment, trade union rights, wider enforcement, and some of the more widely discussed changes to working arrangements and employment protections. Some of the headline reforms employers are hearing about - particularly around guaranteed hours, shift notice, and wider dismissal-related protections - are part of this later phase rather than the April 2026 changes.

That timing point matters for two reasons. First, it helps businesses avoid unnecessary panic or overcorrecting too early. Second, it means compliance should be treated as an ongoing review exercise rather than a one-off update.

What should employers be doing now?

For most businesses, the right response is not to rewrite everything from scratch. It is to review the areas most likely to be affected by the changes already in force.

That usually means checking whether your employment contracts, staff handbook, sickness procedures, family leave policies, and payroll processes still reflect the current rules. Just as importantly, it means thinking about how those rules are being applied in practice. A business can have reasonable documents on paper and still run into trouble if internal decision-making has not caught up.

It is also worth separating what needs action now from what simply needs to stay on your radar. Some changes are already live and should be reflected in documents and processes straight away. Others are still coming and may be better dealt with through forward planning rather than immediate redrafting.

Final thoughts

The Employment Rights Act 2025 is not one single employment law change. It is a staged reform programme, and that is exactly why employers need to pay attention to timing as well as substance.

For small businesses, the most practical question is not just “what changed?” It is “what do we need to update now, and what should we be preparing for next?”

The businesses in the strongest position will be the ones that answer that question early - before an employee issue exposes a gap in their contracts, policies or processes.

If you would like a consultation on the 2026 employment law changes, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.