As we approach the key April 2026 employment law changes, we take a further look at the measures coming into force this year. While the Employment Rights Act 2025 has now been passed, only some provisions have been implemented so far, with further reforms to follow throughout 2026, 2027 and beyond.
Key Points
- National Living Wage, National Minimum Wage and Living Wage Rates: From 1 April 2026, the National Living Wage increases to £12.71 per hour (age 21+), with the National Minimum Wage set at £10.85 (age 18–20), £8.00 (age 16–17) and £8.00 (apprentices). The accommodation offset increases to £11.10 per day. Separately, the Real Living Wage increases to £13.45 per hour and the London Living Wage to £14.80, with employers expected to implement these increases by 1 May 2026.
- Statutory Sick Pay (SSP): From 6 April 2026, SSP increases to £123.25 per week and becomes payable from day one of absence, with the removal of the Lower Earnings Limit. SSP is payable at 80% of average weekly earnings or the flat rate, whichever is lower.
- Family-Related Statutory Payments: From 6 April 2026, statutory maternity, adoption, paternity, shared parental, parental bereavement and statutory neonatal care pay increase to £194.32 per week or 90% of average weekly earnings if lower (with Statutory Maternity Pay and Statutory Adoption Pay paid at 90% of earnings for the first 6 weeks). Maternity Allowance also increases to £194.32 per week or 90% of average weekly earnings if lower. The Lower Earnings Limit to qualify increases to £129 per week.
- Statutory Cap on a Week’s Pay and Tribunal Awards: From 6 April 2026, the statutory cap on a week’s pay increases to £751 (up from £719), increasing the maximum basic award and statutory redundancy payment to £22,530. The maximum compensatory award for unfair dismissal increases to £123,543 or 52 weeks’ gross pay, whichever is lower.
- Vento Bands: For claims presented on or after 6 April 2026, the Vento bands increase to £1,300–£12,600 (lower), £12,600–£37,700 (middle) and £37,700–£62,900 (upper), with the most exceptional cases exceeding £62,900.
- Employment Rights Act 2025: From April 2026, key reforms include the introduction of day-one rights to paternity leave and unpaid parental leave, and the establishment of the Fair Work Agency with enhanced enforcement powers. From October 2026, Employment Tribunal time limits increase from three to six months for most claims. Further significant reforms follow in 2027, including changes to unfair dismissal (with the qualifying period reduced to six months and removal of the compensatory award cap), tighter restrictions on “fire and rehire” (making dismissal and re-engagement automatically unfair in most cases, except where the employer is facing financial difficulty threatening business viability and a fair process has been followed), and new rights for zero-hours and low-hours workers (including the right to a contract reflecting hours regularly worked over a 12-week reference period, reasonable notice of shifts, and compensation for short-notice cancellations or changes).
This is an updated version of our previous article on the 2026 employment law changes, now incorporating the confirmed April 2026 rate changes, including the statutory cap and Vento bands, together with the latest position on the phased implementation of the Employment Rights Act 2025.
2026 Employment Law Changes: Rate Changes
The 2026 employment law changes will include the usual set of rate changes. These will take effect in April 2026, and will include the following:-
| National Minimum Wage & Living Wage Rates (from 1 April 2026) |
As we highlighted in a previous article, the new rates for the National Living Wage and the National Minimum Wage that will apply from the 1st April 2026 were announced on the eve of the 2025 Autumn Budget which was delivered on the 26th November 2025. The new rates that will apply from the 1st April 2026 will be as follows:
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| Family-Friendly Payment Rates (from 6 April 2026) |
Among the most important employment law changes for 2026 are the new rates for statutory maternity pay, statutory paternity pay, shared parental pay, adoption pay, maternity allowance, statutory parental bereavement pay, and statutory neonatal care pay, which were announced by the Government on the 27th November 2025. These employment law changes will apply from the 6th April 2026. The new rates are as follows:
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| Statutory Sick Pay (SSP) (from 6 April 2026) |
Statutory Sick Pay (SSP): The new SSP rate was announced on 27 November 2025, alongside the updated family-friendly payment rates, and will take effect from 6 April 2026.
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| Statutory Cap on a Week’s Pay (from 6 April 2026) |
The new rate for the statutory cap on a week’s pay for the purposes of calculating the basic award and statutory redundancy pay was announced on the 16th March 2026, and will come into effect on the 6th April 2026.
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| Vento Bands (from 6 April 2026) |
The Vento Bands: Following the latest annual re-evaluation, the increases in the Vento bands will take effect from the 6th April 2026.
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Those employers who are signed up to the Real Living Wage and the London Living Wage are expected to implement the changes to the respective rates that were recently announced by the Living Wage Foundation by the 1st May 2026 at the latest. The Real Living Wage has been increased by £0.85 per hour from £12.60 per hour to £13.45 per hour, an increase of 6.7%. The rate for the London Living Wage increased by £0.95 per hour from £13.85 per hour to £14.80 per hour, an increase of 6.9%.
Gender Pay Gap Reporting
At the same time as the 2026 employment law rate changes are taking effect, the usual gender pay gap reporting deadlines need to be met by those organisations with a headcount of 250 or more employees. Accordingly, the deadline for public sector employers to report their data will be the 30th March 2026, with a snapshot date of the 31st March 2025. And for private sector employers and voluntary organisations, the deadline will be the 4th April 2026, with a snapshot date of the 5th April 2025.
2026 Employment Law Changes: Employment Rights Act 2025
The Government recently published an updated roadmap setting out the timetable for the implementation of the Act, most of which will take place during 2026 and 2027, but some of which has subsequently been modified as the legislation has progressed through Parliament. The proposed implementation process for these employment law changes is as follows:-
Phase 1 Employment Law Changes: Royal Assent Or Shortly Thereafter
| Repeal of Strikes (Minimum Service Levels) Act 2023 | The Strikes (Minimum Service Levels) Act 2023 was repealed on 18 December 2025 upon Royal Assent of the Employment Rights Act 2025. |
| Trade Union Act 2016 Measures Removed | Most provisions of the Trade Union Act 2016 were repealed with effect from 18 February 2026, although some elements remain subject to later changes via commencement orders. |
| Political Fund Ballots | The requirement for trade unions to hold political fund ballots every 10 years was abolished on 18 February 2026, and replaced by a requirement to send a reminder notice every 10 years. |
| Industrial Action Notices | Rules governing industrial action notices and ballot notices have been simplified. From 18 February 2026, the notice period for industrial action was reduced from 14 days to 10 days. |
| Protection for Industrial Action | Stronger protections now apply against dismissal for taking part in lawful industrial action. The 12-week limit on automatic unfair dismissal protection was removed on 18 February 2026. |
| January 2026 Consultations |
A number of consultations and draft Codes of Practice were published in early 2026, covering areas such as trade union access, flexible working, fire and rehire, tipping, agency work, detriment protection, and collective redundancy thresholds, with most closing in April and May 2026. Further consultations were launched on 26 February 2026. One (closing 23 April 2026) focuses on protections against detriment for workers taking industrial action following the Supreme Court’s decision in Mercer, with implementation targeted for October 2026. Another (closing 21 May 2026) proposes the introduction of an organisation-wide threshold for collective redundancy consultation, aimed at preventing employers from avoiding obligations by spreading redundancies across multiple sites, with implementation expected in 2027. Both reforms are intended to be introduced through secondary legislation, subject to Parliamentary approval. |
| Trade Union Reforms (February 2026) | Trade union reforms took effect on 18 February 2026, including reduced notice periods for industrial action (from 14 to 10 days), extension of strike mandates from six to twelve months, and removal of the 40% support threshold for important public services. |
| Automatic Unfair Dismissal & Picketing | The 12-week limit on automatic unfair dismissal protection for participation in lawful industrial action was removed, and the requirement to appoint a picket supervisor was repealed on 18 February 2026. |
| Ballot & Notice Simplification | Ballot paper and strike notice information requirements are simplified, largely reverting to pre-2016 standards. The 50% turnout threshold remains in place for now, but is expected to be removed in August 2026 alongside electronic balloting. |
| Public Sector Union Measures | Restrictions on public-sector “check-off” arrangements and facility time reporting requirements were removed on 18 February 2026. Electronic and workplace balloting for industrial action is now expected no earlier than August 2026, while simplification of the statutory recognition process, including removal of the 40% threshold for recognition ballots, is scheduled for 6 April 2026. |
Phase 2 Employment Law Changes: April 2026
The following employment law changes arising out of the Employment Rights Act 2025 will be implemented in April 2026:
| Collective Redundancy Protective Award | From April 2026, the maximum collective redundancy protective award increases from 90 days’ pay to 180 days’ pay where an employer fails to comply with its collective consultation obligations. |
| Day-One Paternity and Parental Leave | From 6 April 2026, paternity leave and unpaid parental leave apply from the first day of employment. Newly eligible employees have also been able to give notice for this leave since 18 February 2026. |
| Bereaved Partner’s Paternity Leave | From 6 April 2026, a new day-one right allows a father or partner to take up to 52 weeks of leave if the mother or primary adopter dies within the first year of the child’s life or placement. This removes the previous 26-week continuous service requirement in these circumstances. |
| Removal of Paternity Leave Restrictions | From 6 April 2026, employees can take paternity leave even if they have already taken a period of shared parental leave. Previously, taking shared parental leave first prevented any later entitlement to paternity leave. |
| Whistleblowing – Sexual Harassment | From 6 April 2026, sexual harassment is added to the list of matters capable of constituting a protected disclosure, strengthening protection for workers who raise concerns. |
| Statutory Sick Pay (SSP) | From 6 April 2026, Statutory Sick Pay becomes a day-one entitlement, with the three-day waiting period removed and the Lower Earnings Limit abolished. The flat SSP rate increases to £123.25 per week, and SSP is payable at the lower of 80% of an employee’s average weekly earnings or the flat rate of £123.25. |
| Enhanced Holiday Pay Record-Keeping | From 6 April 2026, employers must keep records for 6 years showing how statutory holiday pay has been calculated, particularly for workers with variable pay such as overtime or commission. This is intended to support future Fair Work Agency enforcement of holiday pay obligations. |
| Fair Work Agency | The Fair Work Agency is formally established on 7 April 2026. It consolidates key labour market enforcement functions, including enforcement of the National Minimum Wage, Agency Worker Regulations, gangmasters licensing, and certain Modern Slavery compliance functions. Holiday pay and Statutory Sick Pay enforcement are expected to be brought into its remit in phases. |
| Trade Union Recognition | From 6 April 2026, the trade union recognition process is streamlined. Where recognition is decided by ballot, the previous 40% support threshold is removed and replaced by a simple majority of votes cast. The Government also has power to reduce the current 10% membership threshold for a CAC application to as low as 2% through future regulations. |
| Gender Pay Gap and Menopause Action Plans | From April 2026, employers with 250 or more employees may voluntarily publish action plans alongside their gender pay gap data, ahead of mandatory publication from 2027, subject to secondary legislation. Official guidance published in early March 2026 sets out evidence-based actions employers can include to reduce the gender pay gap and support employees experiencing menopause. |
Phase 3 Employment Law Changes: October 2026
The following employment law changes arising out of the Employment Rights Act 2025 will be implemented in October 2026:
| Union Access and Information Duties | Employers must inform workers of their right to join a trade union, which may be done via a written statement provided alongside the Section 1 statement. Trade unions are granted enhanced access rights, including both physical access to workplaces and digital access (such as via email or intranet). |
| Trade Union Representatives | Enhanced rights and protections apply for trade union representatives, including expanded rights to time off and protection from detriment. |
| Union Equality Representatives | A new statutory role for union equality representatives is introduced, with a legal right to paid time off and access to facilities to carry out equality-related duties. |
| Unfair Practices in Recognition | New restrictions on unfair practices during union recognition campaigns apply once the Central Arbitration Committee accepts an application, limiting employer conduct that could influence ballot outcomes. |
| Employment Tribunal Time Limits | The time limit for bringing most employment tribunal claims is extended from three months to six months. |
| Protection Against Detriment | Protections against detriment connected with participation in industrial action are strengthened, addressing gaps identified by case law and expanding worker protections. |
| Non-Disclosure Agreements (NDAs) | New rules are expected to render void any confidentiality clauses that seek to prevent workers from disclosing harassment or discrimination, with implementation anticipated in October 2026 subject to final regulations. |
| Adult Social Care Negotiating Body | Regulations will be introduced to establish a negotiating body for the adult social care sector in England, enabling the development of sector-wide Fair Pay Agreements. |
| Allocation of Tips | The law on allocation of tips is strengthened. Employers must consult with workers or union representatives before introducing or revising a tipping policy, and must review and update their written policy at least every three years. |
| Two-Tier Workforce Code | The two-tier workforce code is implemented in the public sector procurement context, aimed at preventing disparities in pay and conditions between transferred and newly hired workers. |
| Sexual and Third-Party Harassment | From October 2026, employers will be liable for harassment by third parties (including customers, clients, and contractors) across all protected characteristics. The duty to prevent sexual harassment is strengthened to require employers to take “all reasonable steps”. |
Phase 4 Employment Law Changes: December 2026
| Mandatory Seafarers’ Charter | New minimum employment standards will be introduced for seafarers who regularly work in UK territorial waters, through the implementation of a mandatory seafarers’ charter. |
Phase 5 Employment Law Changes: 2027
The employment law changes arising out of the Employment Rights Act 2025 that are being left until 2027 include:
| Ban on Fire and Rehire | From 1 January 2027, dismissing employees in order to re-engage them on less favourable terms will be automatically unfair in most cases. A limited exception will apply where the employer is facing significant financial difficulty threatening business viability and a fair process has been followed. |
| Dismissal and Re-engagement Code | A revised statutory Code of Practice on dismissal and re-engagement is expected to come into force in 2027 alongside the new fire and rehire regime. |
| Unfair Dismissal Qualifying Period | From 1 January 2027, the qualifying period for ordinary unfair dismissal claims will be reduced from two years to six months. |
| Unfair Dismissal Compensation Cap | From 1 January 2027, the statutory cap on compensatory awards for ordinary unfair dismissal will be removed, with Section 124 of the Employment Rights Act 1996 repealed. Awards will continue to be based on actual financial loss and subject to the employee’s duty to mitigate. |
| Zero-Hours and Low-Hours Contracts | Workers will gain the right to be offered a contract reflecting the hours they regularly work over a 12-week reference period, together with rights to reasonable notice of shifts and compensation for short-notice cancellations or changes. These protections are expected to extend to agency workers. |
| Flexible Working | Employers will only be able to refuse a flexible working request where the refusal is objectively reasonable and based on one of the eight statutory business grounds. Employers must consult with the employee and provide a written explanation. |
| Gender Pay Gap and Menopause Action Plans | From Spring 2027, large employers (250+ employees) will be required to publish action plans on addressing their gender pay gap and supporting employees experiencing the menopause. |
| Protections for Pregnant Workers | Protection against dismissal will extend from the point the employer is notified of pregnancy until six months after the employee returns to work, with dismissal permitted only in limited circumstances. |
| Statutory Bereavement Leave | A new day-one right to Statutory Bereavement Leave will be introduced for the loss of a dependant, providing a minimum of one week of leave. |
| Collective Redundancy Consultations | A new organisation-wide threshold for collective redundancy consultation is expected to be introduced to prevent employers avoiding obligations by spreading redundancies across multiple sites. |
| Umbrella Company Regulation | A regulatory framework for umbrella companies will be introduced to improve transparency around pay, deductions and employment status. |
| Collective Grievances | Workers will gain a statutory route to raise collective grievances through a trade union or elected representative, with employers required to respond within a formal process. |
| Electronic Voting for Recognition | Statutory recognition ballots are expected to move to electronic and workplace voting during 2027. |
| Single Worker Status Review | The Government is expected to publish its framework for moving toward a single worker status model, although full implementation may follow in later legislation. |
| Fair Pay Agreements (Social Care) | The first sector-wide Fair Pay Agreement for adult social care is expected to take effect during 2027 following the establishment of the negotiating body in 2026. |
| Blacklisting and Industrial Relations Reform | Anti-blacklisting protections will be extended, including coverage of predictive technologies, alongside wider modernisation of the industrial relations framework. |
‘Next Steps’ Document
The following measures were not included within the employment law changes arising out of the Employment Rights Act 2025. However, the Government confirmed in its ‘Next Steps’ document (published alongside the original Employment Rights Bill) that these potential employment law changes will be addressed at a future point:-
| A Legal Right to Switch Off / Disconnect | A proposed right to disconnect from work communications and obligations outside normal working hours, aimed at protecting employee wellbeing and improving work-life balance. This is expected to be implemented via a statutory Code of Practice rather than primary legislation. |
| Creating a Single Status of Worker | The Government intends to move towards a single status of “worker”, combining employee and worker rights into one framework. Only the genuinely self-employed would fall outside this category. A framework for reform is expected to be published in 2027, with implementation likely to follow in later legislation. |
| Equality (Race and Disability) Bill | A separate Bill is expected to introduce reforms including: (i) extending equal pay rights to ethnic minorities and disabled workers; and (ii) introducing ethnicity and disability pay gap reporting for employers with 250 or more employees. |
| National Minimum Wage (NMW) Bands | The Government has committed to moving towards a “genuine living wage”, with a single rate applying across the workforce. Progress has already begun, with the abolition of the 21–22-year-old age band in April 2025. Remaining age bands are being aligned with the National Living Wage as part of an ongoing transition, and the remit of the Low Pay Commission has been expanded to reflect the cost of living. |
| Reviews | The Government has confirmed that carers’ leave and parental leave will be subject to further review as part of its longer-term employment law reform programme. |
Pension Schemes Bill
The Government confirmed on 13 November 2024 that it would introduce a new Pension Schemes Bill, which was subsequently introduced in the House of Commons on 5 June 2025. It forms part of the wider programme of employment law changes planned for 2026. The Bill has since made significant parliamentary progress and is now in its final parliamentary stages (commonly referred to as “ping pong”), where the House of Commons and the House of Lords must agree on the final wording before Royal Assent is granted.
The Government’s objective in bringing forward the Bill is to support the consolidation of pension assets by encouraging the creation of larger pension investment vehicles, including the proposed merger of tens of billions of pounds of assets from local government pension schemes and defined contribution schemes into larger pension “megafunds”, with a view to increasing investment in UK businesses, infrastructure, and long-term growth.
Salary-Sacrifice Pension NIC Exemption Capped At £2,000 From 2029
As part of the wider programme of employment law changes, the Government announced in the 2025 Autumn Budget that, from April 2029, it will introduce a cap on the National Insurance (NI) exemption for pension contributions made through salary-sacrifice arrangements. Under the changes announced in the Autumn Budget 2025, only the first £2,000 a year of salary-sacrificed pension contributions will remain exempt from employee and employer NI. Any amount contributed via salary sacrifice above that limit will become subject to NI contributions like standard earnings
This change means that employers and employees who currently benefit from significant NI savings via salary-sacrifice pension schemes may see higher costs from 2029 onwards — a consideration worth bearing in mind when reviewing overall remuneration and pension benefits packages.
Youth Employment and Apprenticeship Support
The Government has introduced a series of measures as part of its programme of employment law changes aimed at boosting youth employment and reducing recruitment costs for employers. From 2026, apprenticeship training and assessment costs for under-25s at non-levy-paying SMEs will be fully funded under the Growth & Skills Levy, removing a key financial barrier and encouraging greater uptake of apprenticeships among smaller employers.
Building on these employment law changes, the Government has launched a Youth Jobs Grant offering employers £3,000 to hire 18–24-year-olds who have been claiming Universal Credit and out of work for at least six months. Additional £2,000 incentives are available for SMEs taking on apprentices aged 16–24. As part of these reforms, eligibility for the existing Jobs Guarantee scheme, providing fully subsidised six-month work placements, has been extended from ages 18–21 to include those up to 24.
The Department for Work and Pensions has set an ambition to generate up to 200,000 jobs and apprenticeships through this programme, described as a “new deal” for young people, reflecting a broader policy focus on tackling youth unemployment and supporting sustainable entry into the labour market.
Umbrella Companies
From April 2026, recruitment agencies will become responsible for operating PAYE (Pay As You Earn) when a worker is engaged through an umbrella company. This represents one of the more significant employment law changes affecting labour supply chains. This means the agency will be liable for any PAYE and National Insurance contributions, shifting the responsibility from the umbrella company to the agency. If there isn't a recruitment agency involved, the end-client will be held responsible. This measure, introduced via the Finance Act 2026, is part of a wider programme of employment law changes aimed at tackling widespread non-compliance and fraud in the umbrella company market, where an estimated £500 million is lost to the Exchequer annually.
Economic Crime and Corporate Transparency Act (ECCTA) 2023
On the 1st September 2025, the offence of "failure to prevent fraud" came into effect, which made large organisations (those with more than 250 employees, more than £36 million in annual turnover, and more than £18 million in total assets) criminally liable if an "associated person" commits a fraud intending to benefit the organisation or one of its clients. Strict liability applies, unless the organisation can show that it had "reasonable procedures" in place to prevent the fraud.
The Act also implements new mandatory identity verification (IDV) requirements for directors, persons with significant control (PSCs), and members of limited liability partnerships (LLPs). The time line for implementation of this is as follows:-
| 8 April 2025 | Voluntary identity verification opens. Individuals can proactively complete identity checks using approved methods before requirements become mandatory. |
| 18 November 2025 | Mandatory identity verification is required for all new company directors, persons with significant control (PSCs), and LLP members at the point of incorporation or appointment. |
| 18 November 2025 – 17 November 2026 | Existing directors, PSCs and LLP members must complete identity verification within this 12-month transition period, typically aligned with their company’s next annual confirmation statement. |
| Spring 2026 (TBC) | Individuals filing documents at Companies House will be required to complete identity verification by this stage. |
| Future Date (TBC) | Identity verification requirements will be extended to limited partnerships, corporate directors or members of companies and LLPs, and officers of corporate PSCs. Timelines for these groups will be confirmed in due course. |
Moreover, under the Act only corporate entities registered in the UK will be permitted to serve as corporate directors for UK companies. Additionally, every corporate director on the board must be an individual whose identity has been successfully verified before the corporate director can be officially recognised. These requirements are likely to come into force in late 2025 or in 2026.
Further 2026 Employment Law Changes
Additional employment law changes include the following:-
| Immigration (from 8 January 2026) | As part of the wider employment law changes taking effect in 2026, new applicants in key work routes (including Skilled Worker, Scale-up and High Potential Individual) must meet a higher English language standard (CEFR B2, previously B1). |
| Home Working (from 6 April 2026) | Another of the key employment law changes for 2026 is that employees will no longer be able to claim income tax relief from HMRC for non-reimbursed home-working expenses, including the £6 per week flat-rate allowance. Employers may still reimburse these costs tax-free where homeworking is required. |
| Making Tax Digital (MTD) – Phase 1 (from 6 April 2026) | The employment law changes also coincide with wider tax reforms, including the introduction of Making Tax Digital for Income Tax obligations, requiring mandatory digital record-keeping, quarterly updates, and a Final Declaration for self-employed individuals and landlords with qualifying income exceeding £50,000. |
| Expansion of Tax-Free Benefits (from 6 April 2026) | As part of the broader programme of employment law changes, income tax and National Insurance exemptions are extended to cover employer reimbursements (not just direct provision) for certain benefits, including eye tests, home-working equipment and flu vaccinations. |
| EMI Scheme Expansion (from 6 April 2026) | The employment law changes are also accompanied by business incentive reforms, including expansion of the Enterprise Management Incentive scheme, with the company option limit increasing to £6 million, the gross asset limit to £120 million, the employee limit to 500, and the maximum holding period increasing from 10 years to 15 years. |
| Business Asset Disposal Relief (BADR) (from 6 April 2026) | In addition to these employment law changes, the Capital Gains Tax rate for Business Asset Disposal Relief increases from 14% to 18%. |
| Electric Company Car Tax (from 6 April 2026) | Further employment law changes and related tax developments include an increase in the benefit-in-kind (BiK) rate for electric company cars from 3% to 4%. |
| NI Relief for Veterans (from 6 April 2026) | As part of these ongoing employment law changes, employer National Insurance relief for hiring qualifying veterans is extended until April 2028. |
| Voluntary NI Contributions Abroad (from 6 April 2026) | Among the wider employment law changes and associated reforms, most individuals living or working abroad will no longer be able to pay voluntary Class 2 National Insurance contributions, except in limited cases (including certain individuals covered by international social security agreements and Volunteer Development Workers). Voluntary Class 3 National Insurance contributions remain available but require a significantly stronger UK connection (typically around 10 years of UK residence and/or contributions, replacing the previous 3-year test). Transitional provisions allow some individuals who were eligible under the previous rules to apply under the 3-year test until 5 April 2027, subject to conditions. |
| Electronic Travel Authorisation (ETA) (from 25 February 2026) | The employment law changes also incorporate regulatory developments, including the introduction of a digital pre-travel authorisation requirement for visitors from visa-exempt countries, affecting business travel to the UK. |
| Pension Dashboards (31 October 2026) | The employment law changes also include pensions reform. All in-scope pension schemes and providers must be connected to the new dashboards ecosystem by the 31 October 2026. |
| State Pension Age (from April 2026) | The final element in terms of this section of employment law changes, is the phased increase in State Pension age from 66 to 67, beginning in April 2026 and running until March 2028 for those born between 6 April 1960 and 5 March 1961. |
Other Potential Employment Law Changes
The following are further employment law changes that may potentially be enacted. Some of these employment law changes however may not be enacted in time to form part of the 2026 employment law changes, but instead of later employment law changes beyond the 2026 employment law changes:-
| Non-Compete Clauses Reform | In response to its 2020 consultation on non-compete clauses, the previous Government announced on the 10th May 2023 its intention to legislate for a statutory three-month limit on post-termination non-compete clauses, stating that the aim was to promote “competition and productivity in the workplace.” That proposal was not implemented before the change of Government. Subsequently, on the 21st July 2025, Baroness Jones of Whitchurch confirmed in the House of Lords that the Government had been reviewing the research undertaken to date and would be consulting on options for reform “in due course”. Consistent with that statement, the Department for Business and Trade published a working paper on the 26th November 2025 setting out five potential reform options, including a statutory time limit and an outright ban, with responses closing on the 18th February 2026. |
| Artificial Intelligence (AI) Regulation | AI technology: New measure to “harness the power of artificial intelligence [and] strengthen safety frameworks”. On the 17th December 2024, the Government launched a consultation aimed at clarifying copyright regulations for both AI developers and creative industries, with the aim of fostering innovation and advancement across both fields. On 13th January 2025, the Government introduced a plan outlining the country's AI strategy to enhance economic productivity and expansion. This initiative involves the creation of specialised AI growth areas, investment in new infrastructure, and the establishment of a National Data Library. Since then, the UK Government has continued to progress its AI programme. The copyright consultation launched in December 2024 closed in February 2025, but no formal legislative proposals have yet been published, leaving legal uncertainty around the use of copyrighted works in AI model training. As of June 2025, over £2 billion has been committed to AI infrastructure, growth zones and national data initiatives. In addition, a separate £137 million “AI for Science Strategy” was announced later in 2025 to fund publicly backed AI research and strengthen national computing and data capabilities. |
As stated, some of the above employment law changes may not be enacted in time to form part of the 2026 employment law changes, but instead of later employment law changes beyond the 2026 employment law changes.
Further 2026 Employment Law Changes May Be Announced
Further employment law changes may yet be announced, and any further proposed employment law changes will be detailed in future updates to this article. Nevertheless, already, these employment law changes make up some of the most substantial employment law changes of recent years.
Employers: What This Means
- Review payroll: Update systems for the 1 April and 6 April 2026 rate changes, including the National Living Wage (£12.71), National Minimum Wage rates, Statutory Sick Pay (£123.25), and family-related statutory payment rates.
- Implement SSP reform: Introduce day-one Statutory Sick Pay (removing the three-day waiting period) and ensure SSP is calculated at the lower of 80% of average weekly earnings or the weekly flat rate.
- Update family leave policies: Reflect the introduction of day-one Statutory Paternity Leave and unpaid Parental Leave from April 2026, noting that the 26-week service requirement for Statutory Paternity Pay remains unchanged.
- Introduce Bereaved Partner’s Paternity Leave: Implement a specific policy for this new day-one right, allowing eligible partners to take up to 52 weeks’ unpaid leave where the child’s primary carer dies, and ensure managers are trained to handle these cases sensitively.
- Prepare for increased enforcement: With the Fair Work Agency in place from April 2026, review compliance with National Minimum Wage rules and ensure holiday pay records are accurate and retained appropriately.
- Plan for 2027 reforms: Review dismissal practices and workforce arrangements ahead of 1 January 2027, when unfair dismissal protection will apply from six months’ service and the compensatory award cap will be removed, alongside tighter restrictions on fire and rehire and new rights for zero- and low-hours workers.
