Employment Law is Changing in 2026 What You Need to Know
In Short
1 April: Minimum wage rises for all ages (21+: £12.71, 18-20: £10.85, 16-17: £8.00)
6 April: SSP from day one, all workers qualify. Family leave becomes day-one right. Redundancy protective awards double.
7 April: New Fair Work Agency launches
October 2026: Tipping consultation rules tighten
January 2027: Unfair dismissal qualifying period drops to 6 months
We can help with payroll bits. ACAS has the detailed HR guidance.
If you employ people, 2026 is bringing some big changes.
The Employment Rights Act 2025 is the biggest shake-up to employment law in a generation, with updates rolling out throughout this year and into 2027.
For now, what is changing in 2026?
Wage costs are rising from 1 April
This affects every employer. From 1 April 2026:
National Living Wage rises to £12.71 per hour for workers aged 21 and over
Workers aged 18-20 move to £10.85 per hour
16-17 year olds and apprentices rise to £8.00 per hour
Full rates here: gov.uk/national-minimum-wage-rates
Tipping law is tightening from October 2026
The rules requiring employers to pass tips to workers fairly have been in place since October 2024.
From October 2026, you'll also need to:
Formally consult staff before creating or changing your tipping policy
Review it at least every three years
If you're in hospitality, hair and beauty or another sector where tips are relevant, make sure your policy is documented and current.
Statutory Sick Pay changes from 6 April
Two big changes from 6 April 2026:
SSP is payable from day one of sickness (not day four)
The lower earnings limit is gone... all workers qualify regardless of what they earn
Both have direct payroll implications.
Family leave becomes a day one right from 6 April
Paternity leave and unpaid parental leave are becoming day one rights from 6 April. The previous 26-week qualifying period is gone.
Holiday Records
From 6 April 2026, employers must keep records of annual leave and holiday pay. They must include:
annual leave taken
annual leave carried over from previous years
holiday pay
payments in lieu of holiday
Collective redundancy stakes are higher from 6 April
If you're considering redundancies involving 20 or more employees, the maximum protective award for failing to consult properly is doubling, from 90 days' pay to 180 days' pay per affected employee.
Whistleblowing and harassment protections are strengthening
From 6 April, raising concerns about sexual harassment becomes a protected disclosure under whistleblowing law. Further harassment duty changes are coming in October 2026.
Gender pay gap and menopause action plans
From 6 April are asked to voluntarily create action plans around menopause and gendre pay gaps. This will become mandatory in 2027.
A new enforcement body launches 7 April
The Fair Work Agency starts on 7 April, bringing enforcement of National Minimum Wage, SSP, and holiday pay under one roof. They can investigate employers and issue civil penalties.
Other changes regarding Trade Unions are also incoming plus future changes in January 2027. Watch this space.
What this means for your payroll
Several of these changes feed straight into payroll:
Minimum wage increases
New SSP rules and rates
Changes to statutory family pay
All need to be reflected correctly from April.
If you're unsure how any of these affect your payroll, get in touch and we can point you in the right direction.
Here when you need us with Advice Hours or as a Client.
Disclaimer:
We're accountants, not employment law experts. This blog flags what's coming, especially the bits that affect your payroll and costs.
For HR and employment guidance, ACAS is excellent and free. Use it as your first point of call to check how these changes affect your specific situation and to catch anything not covered here.
This is general information, not personalised or legal advice. We can help with the payroll bits. For everything else, speak to ACAS or an employment law specialist.