Employment Rights Act 2025: April 2026 Changes Employers Must Prepare For

Employment Rights Act 2025: What April 2026 Means for Employers and Payroll

By Kay / 3rd March 2026 / Employment Law / 5 min read.

Employment Rights Act 2025: What April 2026 Means for Employers and Payroll

April 2026 is not just another tax year update. It represents one of the most significant overhauls of employment law in decades.

The Employment Rights Act 2025 received Royal Assent in December, but April 2026 is when many of the most impactful reforms take effect. Alongside this, a new national enforcement body launches, statutory rates increase, and employer obligations become stricter.

If you employ staff or manage payroll, the Employment Rights Act 2025 should already be part of your planning.

Let’s look at what changes from April 2026 and what follows next.

What Changes From 6 April 2026?

Statutory Sick Pay Reform

The most immediate financial impact under the Employment Rights Act 2025 will be changes to Statutory Sick Pay.

Three key reforms apply:

SSP becomes payable from day one
The three waiting days are removed. Payment begins on the first day of sickness absence.

The lower earnings limit is removed
Previously, employees earning below £125 per week did not qualify. From April 2026, all eligible employees qualify regardless of earnings.

New SSP rate and revised calculation
The weekly rate increases to £123.25.
For lower earners, SSP will be the lower of:

  • 80 percent of average weekly earnings, or

  • £123.25.

For example, if an employee earns £100 per week, their SSP entitlement will be £80.

For businesses employing part time, casual or variable hours workers, the Employment Rights Act 2025 significantly increases SSP exposure.

Guidance on Statutory Sick Pay can be found via HM Revenue & Customs and on GOV.UK.

SSP remains non recoverable through PAYE, meaning employers carry the full cost.

Now is the time to confirm your payroll system is updated and capable of handling the revised calculation.

Increases to Statutory Family Payments

From 6 April 2026, the following statutory payments increase to £194.32 per week:

  • Statutory Maternity Pay

  • Statutory Paternity Pay

  • Statutory Adoption Pay

  • Statutory Shared Parental Pay

  • Statutory Neonatal Care Pay

  • Statutory Parental Bereavement Pay

The first six weeks of Statutory Maternity Pay remain at 90 percent of average weekly earnings with no cap.

Rate confirmations and technical guidance are typically published through GOV.UK and interpreted for payroll professionals by the Chartered Institute of Payroll Professionals.

Day One Rights for Paternity and Parental Leave

Under the Employment Rights Act 2025, paternity leave and unpaid parental leave become day one rights.

Employees will no longer need a qualifying period of service before taking leave.

Employment contracts and staff handbooks that reference qualifying periods must now be reviewed and updated.

Bereaved Partners’ Paternity Leave

A new entitlement applies where a mother or primary adopter dies within the first year of a child’s life. The surviving partner or co parent may take up to 52 weeks of leave.

This is a significant development and should be clearly reflected in policies.

Collective Redundancy Protective Awards Double

The maximum protective award for failing to properly consult during collective redundancy processes doubles.

If you are planning any restructuring exercise, compliance with consultation requirements under the Employment Rights Act 2025 is critical. The financial risk of non compliance has increased materially.

Stronger Whistleblowing Protections

Workers raising concerns about sexual harassment will receive enhanced legal protection.

Whistleblowing policies should be reviewed, and managers trained to handle disclosures appropriately.

7 April 2026: The Fair Work Agency Launches

On 7 April 2026, the Fair Work Agency becomes operational.

This new enforcement body brings together powers currently held by:

  • HM Revenue & Customs for National Minimum Wage enforcement

  • The Employment Agency Standards Inspectorate

  • The Gangmasters and Labour Abuse Authority

It will oversee enforcement of:

  • National Minimum Wage

  • Statutory Sick Pay

  • Holiday pay

  • Employment agency regulation

  • Labour exploitation offences

  • Enforcement of Employment Tribunal awards

The consolidation of enforcement signals a stronger and more coordinated compliance environment. The Employment Rights Act 2025 is not just about expanding rights. It is about strengthening oversight.

What Is Coming After April 2026?

The Employment Rights Act 2025 is being introduced in phases.

August 2026 or Later

Electronic and workplace balloting for trade union votes becomes available.

October 2026

Employers must take all reasonable steps to prevent sexual harassment, including harassment by third parties such as customers and contractors.

Tipping rules tighten, requiring more frequent staff consultation.

December 2026

The Mandatory Seafarers’ Charter comes into force for relevant employers.

January 2027

Two of the most impactful reforms take effect:

  • The unfair dismissal qualifying period reduces from two years to six months.

  • The compensation cap for unfair dismissal is removed.

Protections against dismissal and re-engagement practices are also strengthened.

Further reforms throughout 2027 will include menopause and gender equality action plans for larger employers, regulation of umbrella companies, flexible working updates, pregnancy loss bereavement leave, and new rights for zero-hours workers.

Ongoing updates and technical commentary are expected from GOV.UK and professional bodies such as the Chartered Institute of Payroll Professionals.

What Employers Should Be Doing Now

With April 2026 approaching, preparation should already be underway.

Review your payroll systems
Confirm SSP updates are installed and tested.

Model SSP cost impact
Assess absence trends from the last 12 months to understand financial exposure.

Update employment contracts and policies
Remove outdated references to SSP waiting days and qualifying periods.

Train managers
Ensure line managers understand day one rights and the expanded protections under the Employment Rights Act 2025.

Plan ahead for 2027
The reduction in unfair dismissal qualifying service will significantly alter risk exposure and workforce planning decisions.

April 2026 marks a fundamental shift in UK employment law. The Employment Rights Act 2025 affects payroll cost, compliance risk, and everyday management decisions.

Preparation now is always safer and more cost-effective than reacting later.

Contact us today if you would like to discuss outsourcing your payroll

learn about the author

My name is Kay Augustus ACIPPdip, and I am a Payroll Professional.

I started working within Payroll 22+ years ago (it was my first job), and I enjoyed it! I have worked within industry and bureau’s and specialise in streamlining process’.