Landmark labour reform

This year is poised to bring sweeping labour law reforms worldwide, with major changes to employment frameworks expected.

In Europe, several jurisdictions are advancing ambitious domestic reforms that expand rights, strengthen enforcement and raise compliance expectations. The UK is set for the biggest overhaul of employment rights in a generation with its new Employment Rights Act consisting of over 30 individual reforms, some of which are set to take effect in April and October of this year. Belgium’s ambitious government reforms to modernise the labour market, taxation and pensions aiming for economic growth, social justice and sustainability of social security are also due to come into force in 2026. These reforms are expected to significantly impact workforce management and cost structures. Finally, in Italy, the so-called ‘Budget Law’ took effect at the start of 2026, introducing a wide range of measures to support workers, families and businesses.

Countries in the Asia Pacific region are also modernising legal frameworks to balance employer flexibility with stronger worker protections. India is expected to fully implement its four new Labour Codes early this year, a historic change that will consolidate and replace 29 existing labour laws. Japan is preparing for the most significant overhaul of its Labour Standards Act in over 40 years, with legislative submission and phased implementation expected from 2026 (but timing remains uncertain). In Thailand, two draft amendments to the Labour Protection Act are currently under review and, if passed, would materially strengthen employee rights and expand employer obligations.

Diversity, discrimination and pay gap reporting

Diversity and inclusion remains under the spotlight in 2026, with pay transparency and anti-discrimination measures driving important regulatory shifts worldwide.

Addressing gender pay gaps and ensuring pay equity are critical issues for HR teams across the EU. Member States must implement the Pay Transparency Directive by June 2026, which introduces stricter requirements impacting recruitment, pay structures, and promotion policies, as well as new individual rights. Gender equality and women’s rights also remain central to EU legislative efforts. The EU Gender Equality Strategy 2026–2030, expected in March 2026, will outline concrete measures to implement the Roadmap for Women’s Rights. Elsewhere, the deadline for board membership targets under the EU Women on Boards Directive falls on 30 June 2026.

Outside the EU, Chile’s gender balance requirements for boards of listed companies and certain corporations overseen by the Financial Market Commission took effect at the start of this year, with transitional limits on board composition.

Elsewhere, in the US, debates on diversity, equity, and inclusion (DEI) continue to influence the strategies of multinational employers. Many organisations are revising DEI language and policies to reconcile conflicting cultural norms. At our Managing an International Workforce conference in London (June 2025), 52% of attendees reported having changed or considering changes to their DEI approach, while 68% had experienced or anticipated employee pushback for having done so. Practices deemed unlawful in the US may clash with regulatory requirements in Europe, a tension we explore in our Guide to the New World: Diversity, Equity and Inclusion report, and a trend we expect to continue into 2026.

In APAC, the regulatory landscape continues to tighten around anti‑discrimination, harassment prevention, and transparency. Singapore has now passed the Workplace Fairness (Dispute Resolution) Bill, which, along with the previously passed Workplace Fairness Bill, will form the Workplace Fairness Act. This is expected to take effect in late 2027, but employer preparations should already be underway. In Japan, legislative amendments to strengthen protections against harassment and promote gender equality are expected to come into effect progressively throughout 2026, with certain provisions scheduled to commence in April 2027.

Artificial intelligence in the workplace

AI governance is a hot topic this year as employers explore strategies for workplace AI adoption against a tide of evolving regulation.

In the EU, and throughout 2025, we saw Member States designating enforcement bodies ready for the coming into force of the EU AI Act’s enforcement provisions on 2 August 2026. Given the impact of AI in the workplace, scrutiny of HR-relevant “high risk” use cases, e.g., recruitment, performance analytics, worker monitoring and profiling/biometrics, coupled with greater works council engagement mean the spotlight will be shining on these areas this year. It will also be interesting to see how other countries in the region develop AI frameworks, such as the UK, with the next King’s speech expected to include a new AI Regulation Bill.

In APAC, AI governance is advancing yet remains fragmented, and is lagging behind AI adoption, with most countries in the region favouring principles-based or sectoral guidance over EU-style comprehensive legislation. Some notable exceptions to this include Malaysia with its first-of-its-kind AI Governance Bill expected to be tabled in Parliament in June 2026.

Finally, in the Americas, lots of eyes will be on the US and the tension between the current administration’s ambitions for a unified national AI framework, and the current state-by-state governance approach that is being adopted. Elsewhere, several countries in the region have proposed legislation that seeks to regulate AI, with examples including Chile, Colombia and Mexico. Meanwhile, obligations under Peru’s new regulation which sets a technical and legal framework for developing and using AI systems are starting to be phased in, with sectoral deadlines between 2026 and 2028. It will be interesting to see how these initiatives progress this year.

Takeaway for employers

It’s already clear that 2026 will usher in a broad spectrum of employment law developments – from significant labour reforms and enhanced pay transparency requirements to the next wave of AI regulation. There are, of course, many other important trends we haven’t delved into here, including forthcoming changes in platform work regulation, pensions and social security reforms and immigration and global mobility developments, proposals to streamline EU legislation and trends in restructuring and return to office policies.

Stay tuned: we’ll be exploring all of these areas and more over the coming weeks and months.

In the meantime, you’re welcome to request a demo of our AI assisted employment law tool, Delphius, which provides detailed updates and assists with horizon scanning across 55+ countries.