The Employment Rights Act will bring 28 key legal changes in 2026 and 2027. The changes start in April this year. If you’re an employer, find out the actions you need to take now

The new act is expected to cost businesses £1 billion a year when fully implemented. Not getting prepared now could lead to disruptions and penalties. Our partner BrightHR has given us a rundown of some of the changes and the actions you should take if you’re an employer.

Sick pay reforms

The change

Statutory Sick Pay (SSP) will be payable from day one. The lower earnings limit will be replaced by a new calculation. SSP or 80% of average weekly earnings, whichever is lower.

The impact

Extra costs, as you’ll have to pay SSP from your own pocket. And extra admin in terms of record keeping and payroll updates.

Action for you

Prepare your payroll. Remove the waiting period and lower earnings limit and add the new calculations. Make sure you document sickness absences and keep payment records in case you need to prove that you’re complying.

How BrightHR can support

They can provide:

• absence management software to streamline SSP procedures and return to work forms
• integrated payroll software to calculate SSP and new rates
• wellbeing support to reduce absences.

Parental leave rights

The change

Parental leave and paternity leave will be day one rights from 6th April 2026.

The impact

Staff expecting babies have already started to give notice ahead of when their rights kick in.

Action for you

Update your policies and systems to ensure they meet new leave and pay rights. Make sure your records remain up to date.

How BrightHR can support

They can provide:

• a library of up-to-date document templates. Including parental and paternity leave policies, handbooks and contracts
• a 24/7 advice line staffed by UK-based experts for support with managing leave requests.

New enforcement body

The change

The Fair Work Agency is launching to enforce key employment rights. This includes pay, holidays, and modern slavery.

The impact

Businesses could be inspected even without a complaint. The burden of proof lies with you, so record keeping will be vital.

Action for you

Get inspection ready. And stay that way. Make sure your record keeping is up to scratch and documents are available if needed.

How BrightHR can support

They can provide:

• HR software with secure storage of employment records, policies, and procedures
• a log of read and acceptance receipts from your staff
• integrated HR and payroll software. So you can keep track of absences, timesheets, and pay.

Other changes

There are 2 more changes to be aware of in April. One is a change to the maximum award for collective redundancy. It's doubling, from 90 to 180 days' pay. The other is protection from detriment and unfair dismissal for staff who make a sexual harassment disclosure. You'll need to update your employee handbooks with both of these changes.

Changes beyond April 2026

Once you’re ready for April, you should think ahead to the next set of reforms. There’ll be more in October this year, and in 2027.

These include changes to:

• employment tribunal time limits
• employer duties to prevent harassment from third parties
• unfair dismissals
• fire and rehire.

Further support

It may seem like a legal minefield, but award-winning advice and support are what makes BrightHR leaders in their field.

BrightHR supports businesses worldwide with expert HR, health & safety and payroll advice and easy-to-use software. Their UK-based HR and employment law experts are available with 24/7 advice. So, you can stay compliant, save time and free up space to focus on growing your business.

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Cost figure in 1st paragraph taken from page 7 of this report:

https://assets.publishing.service.gov.uk/media/695d3ebfbd1c076f787e7399/employment-rights-act-2025-economic-analysis.pdf