Jump to: The Employment Rights Act | Increases to statutory rates | Employment legislation changes 2025 | Employment legislation changes 2024 | Family-friendly leave
The Employment Rights Act 2025
As of April 2026
The Employments Right Act 2025 became law on 18 December 2025 and will introduce additions and amendments to existing legislation. The employment law changes included in the Act will happen over 2026 and 2027.
Some of the key changes include a reduction in the qualifying period for unfair dismissal claims and the removal of the waiting days to qualify for Statutory Sick Pay (SSP). There are also a number of changes affecting areas such as family leave, whistleblowing, redundancies and sexual harassment.
There are a variety of different platforms supplying summaries of the changes and ways that employers can prepare themselves;
- gov.uk: Employment Rights Bill factsheets
- ACAS: Employment Rights Bill
- Hill Dickinson: What does the Employment Rights Bill contain?
ACAS have a webinar available which summarises the changes for employers.
Changes as of 6 April 2026
The changes below came in to effect on 6 April 2026:
- Unpaid parental leave - parental leave is now a day one right for employees.
- Paternity leave - Paternity leave is now also a day one right. The changes to paternity leave also mean that it can be taken after someone has taken shared parental leave.
- Bereaved partners paternity leave - This is a new type of leave giving employed, bereaved fathers and partners, a day-one right to extended paternity leave in the first year of a child's life if they are in the tragic circumstance of losing the child's mother or primary adopter.
- Sickness absence changes - Statutory Sick Pay (SSP) will be payable from day one of absence, removing the three-day waiting period, and lower earnings limit that is currently in place. See more information about this change.
- Whistleblowing - Sexual harassment in the workplace will be added to the list of protected disclosures under whistleblowing legislation.
- Holiday pay records - Employers must keep detailed records for 6 years showing compliance with holiday pay regulations.
- Creation of the Fair Work Agency - The Fair Work Agency (FWA) is a new single enforcement body. The FWA will have a wide range of powers including the ability to bring Employment Tribunal claims on behalf of workers and to issue compliance notices and financial penalities. Further information on the Fair Work Agency can be found here.
Read more on family-friendly leave
We will continue to monitor the situation and update this page accordingly.
Increases to statutory rates - April 2026
From 1 April 2026, the National Living Wage (NLW) and National Minimum Wage (NMW) rates will rise as follows:
- NLW will increase from £12.21 to £12.71 per hour (for people aged 21 or older)
- NMW for workers aged 18-20 will increase from £10.00 to £10.85 per hour
- NMW for workers aged 16-17 will increase from £7.55 to £8.00 per hour
- The apprentice minimum wage will increase from £7.55 to £8.00 per hour
Real Living Wage
The Real Living Wage is higher than the governments minimum, or National Living Wage, and is an independently calculated hourly rate of pay that is based on the actual cost of living. From 22 October 2025, the current rates are:
- £13.45 in the UK
- £14.80 in London
Statutory Sick Pay – From 6 April 2026
-
Statutory Sick Pay (SSP) increased from £118.75 to £123.25 or 80% of the employees weekly pay
Statutory family-friendly payments – From 6 April 2026
-
Statutory maternity pay prescribed rate, statutory paternity pay, statutory adoption pay, statutory shared parental pay, and statutory parental bereavement pay increases from £187.18 to £194.32 per week.
Key legislation to be aware of:
Neonatal care leave and pay
- The Neonatal Care Leave and Miscellaneous Amendments Regulations 2025 came into force for births or adoptions on or after 6 April 2025.
- The regulations provide for a day one right for employees to take neonatal care leave where a child has received neonatal care for an uninterrupted period of seven days excluding the day that the neonatal care starts.
- The right applies to each parent separately, and up to 12 weeks leave may be taken within 68 weeks of the birth.
- The Statutory Neonatal Care Pay (General) Regulations 2025 also come into force on 6 April 2025. Where the employee has 26 weeks continuous service and earnings of an average of at least £125 a week (the lower earnings limit), they will be entitled to statutory neonatal care leave pay of £187.18 a week (as at April 2025).
- Employers need to prepare a neonatal policy, consider how this should be publicised and ensure that employees understand this process for taking leave.
For more details on neonatal care leave and pay, visit the gov.uk or ACAS websites.
National Insurance contributions
- From 6 April 2025, the government is implementing four significant changes to employer national insurance contributions (NICs).
- Two of these represent substantial tax increases:
- The rate of employers NIC’s increases from 13.8% to 15%.
- Because of the lowering of the earnings threshold, employers will pay NICs on employee earnings from £5,000 per year rather than £9,100.
- Additionally, the rates for Class 1A and Class 1B employer contributions, which apply to taxable benefits-in-kind, will increase accordingly.
- To partially offset these increases, the government is enhancing the employment allowance in two ways:
- It will become available to all employers, removing the current restriction limiting it to employers with an annual employer NICs liability of less than £100,000.
- The maximum amount employers can save through the employment allowance will increase from £5,000 to £10,500.
Further information about changes to the employer national insurance contribution increases can be found on the gov.uk website.
Immigration
- The government published its comprehensive Statement of Changes to the Immigration Rules on 12 March 2025, and the changes will come into effect on various dates in April 2025.
- The developments include changes to the Skilled Worker Route and Global Talent Route as well as changes to Skilled Worker salaries.
Further information about this can be read in the Blake Morgan article Changes to Immigration Rules, or information on UK Visas and Immigration can be found on the gov.uk website.
Employment Rights (Flexible Working) Act 2023
- Employees will be entitled to request flexible working arrangements from the first day of their employment rather than after 26 weeks as it was previously. This includes requests for part-time, term-time, flexitime, compressed hours, and varied working locations.
- Employees will no longer be required to set out the effect their requested arrangements will have on the organisation, nor suggest ways their employer can manage it.
- Employers will have to consult with the employee on alternatives before refusing their request for flexible working arrangements and explain the reasons behind their decision. Previously, employers could deny any request for flexible working without explanation.
- Employers are now obliged to deal with a request, including an appeal, within two months, compared to the three months previously.
- Employees can make two statutory requests for flexible working in any twelve-month period, as opposed to one request previously.
Further information on flexible working can be found at the gov.uk website.
Carers Leave Act 2023
The Carer’s Leave Regulations 2024 introduce a new statutory right to unpaid carer’s leave for employees with caring responsibilities.
This leave is a day-one right, available to all employees without any qualifying periods. It applies to anyone caring for a spouse, civil partner, child, parent or other dependent who needs care because of a disability, old age or any illness or injury likely to require at least three months’ care. This leave is unpaid. The maximum duration of leave is one week per year. While employers can’t deny an employee’s request for carers leave, they can postpone if you reasonably consider that the operation of the organisation would be unduly disrupted if it were approved.
Further information about unpaid carers leave can be found on the gov.uk website.
Protection from Redundancy (Pregnancy and Family Leave) Act 2023
Under the current law, employees on maternity leave, shared parental leave or adoption leave already have special protection in a redundancy situation. From 6 April 2024, the Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 extend redundancy protection to apply during pregnancy and for a period of 18 months after birth or placement of a child for those taking maternity, adoption or shared parental leave.
Paternity Leave (Amendment) Regulations 2024
The amended regulation makes significant changes to paternity leave, allowing is to be taken in the first 52 weeks after birth or adoption, and either as two separate weeks, one single week or two consecutive weeks together.
Agency workers
From April 2020, the Agency Workers Regulations were amended so that agency workers with 12 weeks continuous service are paid the same amount as permanent staff.
New agency workers must be provided with a ‘Key Facts Page’ to tell them more about a job before they accept a role. The key facts page can’t be longer than two A4 pages and must explain:
- The type of contract
- The minimum rate of pay
- The person who pays the wage
- That worker gets the same pay as a permanent member of staff after 12 weeks
See more information on agency workers.
Holiday pay for those with irregular hours
The Working Time Regulations 1998 have also been amended to increase the reference period for determining an average weeks pay (to calculate holiday pay). Where a worker has been employed by their employer for at least 52 weeks, the reference period is increased from 12 weeks to 52 weeks.
Where a worker has been employed by their employer for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed. This development makes it fairer and much easier to calculate holiday pay and protect workers who work irregular hours.
Further changes to holiday rules came into effect from 1 April 2024. For holiday years beginning on or after this date, holiday entitlement for part-year and irregular hours worked can be calculated by taking 12.07% of the hours worked in the pay period.
Rolled up holiday will also be permissible from their date for part-years and irregular hors workers only.
Further information on holiday pay and entitlements can be found on the gov.uk website.
Key tribunal compensation limits
The government has announced several changes to employment tribunal compensation and limits. The most important of these are detailed below:
|
Payments |
From 6 April 2024 |
From 6 April 2025 |
|
The maximum amount of a ‘weeks’ pay’ for the purpose of calculating a redundancy payment or for various awards, including the basis or additional aware of compensation for unfair dismissal |
£700 |
£719 |
|
The minimum basic aware for certain unfair dismissals (including health & safety dismissals) |
£8,533 |
£8,763 |
|
The maximum basic award for unfair dismissal and statutory redundancy payment (30 week’s pay), subject to the limit on a week’s pay |
£21,000 |
£21,570 |
|
The maximum amount of a compensatory award for ordinary unfair dismissal is capped at the lower of one year’s gross pay or £118,223. |
£115,115 |
£118,223 |
* A few exceptions exist where the cap does not apply, including dismissals for whistleblowing or raising certain health and safety concerns. Additionally, there is no limit on awards for dismissals related to unlawful discrimination.
Guidelines for injury to feelings awards
An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. The award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered. To assist Employment Tribunals, the Court of Appeal previously set out guidance for quantifying awards for injury to feelings, known as the Vento bands.
On or after 6 April 2025, the Vento bands increased as follows:
- Lower band (less serious case): £1,200 - £12,100
- Middle band (cases that do not merit an award in the upper band): £12,100 - £36,400
- Upper band (the most serious cases): £36,400 - £60,700
Gender pay gap reporting
All employees with 250 or more employees are required by law to comply with gender pay gap reporting under the specific duties of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Employers must report their gender pay gap data on the snapshot date each year which is 31 March for most public authority employers and 5 April for private, voluntary and all other public authority employers. The gender pay gap is the difference between the average (mean or median) earnings of men and women across the workforce. Further guidance on gender pay gap reporting can be found on the gov.uk website.
IR35
The off-payroll/IR35 rules to prevent the exploitation of personal service companies for tax avoidance have been in force for all public sector businesses and medium or large sized private sector businesses since 6 April 2021, all such organisations are responsible for deciding the employment status of their workers. This includes some charities and third sector organisations. The rules shift responsibility for determining the status of a contractor for tax purposes onto the client. Guidance on understanding off-payroll working (IR35) can be found here.
Post-employment notice pay
Changes to the calculation of Post-Employment Notice Pay (PENP) took effect on 6 April 2021 which resulted in a more consistent calculation.
PENP is the amount of a ‘relevant termination award’ paid to a departing employee that represents a payment in lieu of all or part of their notice entitlement. It is calculated using the statutory formula, based on the employee’s basic pay and the number of days (or months) in the individual’s period of unserved notice (the post-employment notice period).
This amount is subject to deductions for income tax and national insurance contributions, therefore, PENP can no longer be paid free of tax.
Confidentiality and NDAs
ACAS has published new guidance on non-disclosure agreements (NDAs). These commonly form part of settlement agreements with departing employees.
The ACAS guidance discourages the routine use of NDAs. It also states that a worker should be given reasonable time to consider the agreements carefully and makes it clear that NDAs should not be used to stop someone from:
- Reporting a discrimination or sexual harassment at work to the police
- Disclosing a future act of discrimination or harassment
- Whistleblowing