This month has seen a number of employment law changes come into force, as the Government begins implementing reforms introduced under the Employment Rights Act 2025.  In this blog, Debbie Jones, Lead HR Consultant, sets out the changes that you need to be aware of to ensure that you are staying legally compliant.

National Minimum Wage Increases

As is usual in April, National Minimum Wage and National Living Wage rates have increased.  From 1 April 2026, these are as follows:

• The rate for workers aged 21 or over (the National Living Wage) increases to £12.71 per hour (previously £12.21).

• The rate for workers aged at least 18 but under 21 increases to £10.85 per hour (from £10.00).

• The rate for workers aged 16 to 17 increases to £8.00 (from £7.55).

• The apprentice rate increases to £8.00 (from £7.55). 

• The accommodation offset increases to £11.10 (from £10.66)

Employers must ensure all workers are paid in line with the new rates, particularly where salary sacrifice or deductions could bring pay below minimum thresholds.

Statutory Sick Pay Changes

There have been significant changes to Statutory Sick Pay (SSP), broadening access for employees, which are as follows:

• Day one entitlement: employees have the right to SSP from day one of sickness, rather than day four and from the start of employment.
• No minimum earnings threshold: the removal of the Lower Earnings Limit (LEL) means all eligible employees, regardless of earnings, will have access to SSP.
• New calculation method: employees to be paid SSP at a rate of 80% of their normal weekly earnings or the flat rate set by the Government, whichever is lower.
• The rate of statutory sick pay increases from £118.75 to £123.25 per week.

These changes mean that more employees will qualify for SSP, with no earnings threshold and no three-day waiting period.  You should review your sickness absence policies, contract of employment templates and employee handbook to ensure that they reflect these changes and also take action to ensure your payment methods take the changes into consideration when an employee is off sick.

Statutory Redundancy Pay and Tribunal Award Limits

As is standard each April, limits on statutory payments and tribunal awards have also increased.

This includes:

• The maximum weekly pay used to calculate statutory redundancy pay (now £751, previously £700)
• Compensation caps for unfair dismissal claims (now £118,223, previously £115,115)
• Other statutory employment payments linked to weekly pay thresholds (now £751, previously £700)

Higher limits mean increased financial exposure in dismissal and redundancy scenarios. Employers should ensure any ongoing and future processes reflect the updated figures.

Doubling of Collective Redundancy Protective Award

The Employment Rights Act 2025 provides for the maximum period of the protective award (payable where an employer fails to comply with its consultation requirements) to be doubled from 90 to 180 days.

Note that collective redundancy applies where an employer proposes to make 20 or more employees redundant at one establishment within a period of 90 days or less.

This is a substantial increase in risk. Employers must ensure strict compliance with consultation obligations, including timing, information sharing, and employee engagement.

Establishment of Fair Work Agency to Enforce Employment Rights

A major structural reform in the creation of a new single enforcement body: the Fair Work Agency, established on 7 April 2026.

The Fair Work Agency will incorporate existing agencies, including the Gangmasters and Labour Abuse Authority, the National Minimum Wage Unit and the Employment Agency Standards Inspectorate.

The new body will be responsible for enforcing rights including:

• the national minimum wage;
• statutory sick pay;
• holiday pay;
• regulations for employment agencies;
• unpaid employment tribunal awards;
• the licensing regime for businesses operating as “gangmasters” in certain sectors; and
• parts of the Modern Slavery Act 2015.

The Agency will be able to issue a notice of underpayment where an employer has failed to pay a statutory payment, including holiday pay and statutory sick pay. This will require payment of an additional penalty, as well as payment of the amount owed to the employee.

It will also have the power to bring employment tribunal claims where it appears that a worker who has the right to bring a claim will not do so.

It will have powers to inspect workplaces, issue fines, bring civil proceedings and prosecutions.

While the Agency has been established, the timeline for full enforcement powers is still to be confirmed.

Recording Annual Leave

Under the Employment Rights Act 2025, employers will be required to create and retain records that are sufficient to demonstrate compliance with statutory annual leave entitlements and holiday pay requirements.

The legislation does not prescribe a specific format; however, records must be adequate, accurate, and reasonably accessible. Employers may choose how they maintain these records, provided the approach is reasonable.

At a minimum, records should include:

• Annual leave taken.
• Annual leave carried forward from previous leave years.
• Details of holiday pay, including which elements of pay have been included or excluded in calculations e.g., overtime, commission, bonuses.
• Any payments made for untaken leave upon termination of employment must be recorded

These records must be retained for a minimum of six years.

Failure to comply with this duty will constitute a statutory offence. Enforcement will sit with the new Fair Work Agency, which will have the authority to investigate and issue penalties. Notably, enforcement action can be taken without the need for an employment tribunal claim.

Paternity and Ordinary Parental Leave

There have also been notable changes to paternity leave and ordinary parental leave requirements, which are as follows:

Changes made:  

• Removal of the 26 weeks’ continuous service requirement (paternity leave is now a day-one right).
• Removal of the requirement for paternity leave to be taken before Shared Parental Leave.
• Update to confirm paternity leave can be taken even where Shared Parental Leave has already been taken.
• Ordinary Parental Leave: Removal of the one-year service eligibility requirement (now a day-one right).

Bereaved Partner’s Paternity Leave Policy (New)

A new Bereaved Partner’s Paternity Leave Policy has been introduced. The key provisions include:

• Up to 52 weeks’ unpaid leave where the child’s mother (or main adopter) dies within the first year following birth or placement.
• Eligibility for the child’s father or the spouse, civil partner or partner of the mother/adopter.
• Up to eight weeks’ leave where both the child and the mother/adopter die within the first year.
• Applies where the death occurs on or after 6 April 2026.

Whistleblowing Policy and Anti-Harassment and Bullying Policy

Smaller, but just as important changes have been made in relation to the anti-harassment and bullying policy and whistleblowing. Now, sexual harassment has been included as an example of a qualifying disclosure under whistleblowing legislation.

Action to Take

Given the number of changes that have come into place, you should be taking the following steps:

• Review and update your HR policies, employee handbook and contract of employment templates to make sure they align with the changes – this is something that we can do for you!
• Check with your payroll to ensure that your SSP and wage calculations are correct.
• Train your managers on these new updates – especially SSP!
• Seek advice – we are here to help and support you through these changes and to keep you compliant.

Staying ahead of these developments is not just about compliance—it’s about protecting your organisation from risk and building fair, sustainable employment practices.

If you would like support reviewing your policies and contracts or understanding how these changes affect your business, now is the time to act. Get in touch: hrsupport@colabhr.co.uk