It’s that time of year when employment law changes traditionally take effect, and this year we’re expecting more than usual thanks to the introduction of the Employment Rights Act 2025.

With so many developments on the horizon, here’s our summary of the most important changes that are taking effect in Great Britain (GB) next month.

While most of these changes will apply only in GB, some changes are also relevant to Northern Ireland (NI). We have highlighted where this is the case, or where other similar changes are expected under Northern Irish employment reforms.

Increases to statutory rates

From 1 April 2026, we will see increases to the National Minimum Wage. These are as follows:

  • the National Living Wage (NLW) will increase from £12.21 to £12.71 per hour;
  • the 18 to 20 year old rate will increase from £10.00 to £10.85 per hour; and
  • the 16 to 17 year old rate will increase from £7.55 to £8.00 per hour.

The accommodation offset limit will also rise to £11.10 per day.

The government originally promised to phase out the 18 to 20 year old minimum wage, so that all over-18s would benefit from the NLW by 2028 or 2029. However, media speculation suggests this change could be delayed given high levels of youth unemployment.

Minimum wage enforcement will soon be transferring to the new Fair Work Agency (see below), which could result in an increase in enforcement. Therefore, employers should:

  • continue monitoring workers earning just above legal minimums and review pay practices that might bring pay below the legal minimum; and
  • consider a minimum wage audit, to identify and remedy breaches before HMRC does so.

The limits in relation to unfair dismissal,/redundancy pay are increasing as follows:

  • Basic award: increasing from £8,763 to £9,157.
  • Compensatory award: increasing from £118,223 to £123,543.
  • Maximum amount of a “week’s pay”: increasing from £719 to £751.

Notably, this is the last time the unfair dismissal compensatory cap will increase before it is abolished entirely on 1 January 2027 (under the current timeframe).

Additionally, from 6 April, other limits and statutory payments will increase as follows:

  • Family related benefits: the prescribed or flat rate of statutory maternity, adoption, paternity and shared parental pay will rise from £187.18 to £194.32 per week.
  • Statutory sick pay (SSP): SSP will increase from £118.75 to £123.25 per week.

NMW, family related benefits and SSP rates are the same in Northern Ireland, but rates for unfair dismissal and redundancy pay are distinct.

SSP reform

As well as the rate increase, other changes to SSP will take effect from 6 April:

  • the current waiting period will be removed so that SSP can be paid from day one (rather than day four); and
  • the lower earnings limit will be removed, making all employees eligible for SSP. For some lower earners their rate of SSP will be calculated as a percentage of their earnings. The amount paid will be the lower of the prescribed weekly rate and 80 per cent of the employee’s normal weekly earnings.

Whilst this change is unlikely to materially impact employers that already have sick pay schemes applying from the first day of sickness, those that do not will inevitably see an increase in costs and a likely uptick in short term absences.

Statutory sick pay is a UK-wide entitlement, so these changes will affect businesses in Scotland and NI, as well as England and Wales.

In response, organisations should review and update their sickness policies to reflect the new position. They should also ensure that managers have been trained in dealing with sickness absence and, if absence rates increase, consider if any improvements can be made to how they deal with excessive sickness absence and/or incentivise attendance. We have written in detail about this development here.

Day one parental and paternity leave

From 6 April 2026, the ERA will scrap any service requirement for parental leave and paternity leave, meaning both can be taken from day one of employment. Currently, employees must have one year’s service to qualify for parental leave and 26 weeks’ for paternity leave. Employees will also be allowed to take paternity leave after shared parental leave which is not currently possible.

The paternity leave change will apply to babies born on or after 6 April 2026 (or earlier when the Expected Week of Childbirth starts on or after 5 April). However, there is no change to the eligibility requirements for paternity leave pay, and the leave will still be unpaid if the employee does not have 26 weeks’ service.

Employers should review and update their family leave policies ahead of the changes. Some employers may wish to enhance pay regardless of length of service, or keep the position under review until we know the outcome of the government’s parental leave system review next year.

This change will not apply in Northern Ireland, where the 26 week service requirement remains for entitlement to statutory paternity leave and pay. However, under the proposed ‘Good Jobs’ Employment Rights Bill reforms statutory paternity leave is expected to become a day one right and be available in addition to shared parental leave, as will be the case in GB. These remain proposals at this stage with no current implementation date.

Paternity leave for bereaved partners

The right for partners to take up to 52 weeks of leave if the mother dies in the first year of a child’s life under the Paternity Leave (Bereavement) Act is expected to come into force from 6 April 2026. This is a day one right, and the amount of leave will vary based on the date of the bereavement. It must be taken in one block after the bereavement and start and end within 52 weeks from the day after the child’s birth.  If the leave starts within eight weeks of the bereavement only oral notice is required. Otherwise, it must be one week’s notice in writing containing set information. There is no provision for any statutory pay for this leave.

Employers should review and update any family or compassionate leave policies to reflect the existence of the new leave. Ultimately, its impact is likely to be limited due to the small number of cases where the right will apply, and the fact that many employers would generally allow additional leave in these circumstances in any event.

This will not apply to NI and no similar reforms are currently proposed.

We have written in detail about the changes to paternity and parental leave here.

Collective redundancies

There will be a doubling of the maximum protective award for failing to properly collectively consult over collective redundancies from 90 days’ to 180 days’ pay per employee. This is expected to apply to dismissals taking place on or after 6 April 2026.

Given the higher risks that will be associated with collective redundancies, employers may wish to:

  • consider whether having a standing employee representative body might be worthwhile; and
  • review any approaches which aim to “buy out” collective redundancy consultation rights given the significant increase in costs (or increase the budget to reflect this).

We have written about this change and the other planned changes to collective redundancies under the ERA here.

This will not apply to NI and no similar reforms are currently proposed.

Statutory union recognition reform

The ERA has introduced changes to make it easier for trade unions to win statutory recognition for collective bargaining purposes. We expect that, from 6 April 2026, unions will no longer be required to show that a majority of the proposed bargaining unit is likely to support recognition at the outset of an application to the CAC, and, where a ballot is held, the requirement that at least 40% of all workers in the bargaining unit vote in favour of recognition will also be removed.

In response, employers should review their current employee representation frameworks to ensure that these are inclusive, representative and effective. Please note, we are also expecting significant further changes to take place at a later date which we have written about in detail here.

This will not apply to NI, however, similar reforms are proposed under the ‘Good Jobs’ Employment Rights Bill, through which it is expected that the threshold for trade unions to seek recognition will reduce from 21 to 10 employees. This remains a proposal at this stage with no current date for implementation.

Sexual harassment as qualifying disclosure

From 6 April 2026, disclosing sexual harassment will be added to the list of what counts as a qualifying disclosure for whistleblowing purposes, as long as it still meets the test of reasonable belief that it is made in the public interest (and the other usual tests needed for it to be a protected disclosure).

While it clarifies the position, this change is expected to be relatively low impact as most disclosures about sexual harassment would already qualify under the existing framework.

This will not apply to NI, and no similar reforms are currently proposed.

Equality action plans

The ERA has introduced a new requirement for employers with 250 or more employees to publish equality action plans covering:

  • reducing their gender pay gaps; and
  • supporting women through the menopause.

Employers can publish these reports on a voluntary basis from April 2026, but publication will become mandatory in April 2027.

The government published some employer guidance in early March and we are expecting more detailed guidance to be published in April. We have written about the proposals in detail here.

This will not apply to NI which does not currently have mandatory gender pay gap reporting. However, the Department for the Communities has made clear that action plans to reduce gender pay gaps will be required once this regime is implemented. The timeframe for implementation is currently unknown.

There are no proposals at present to implement menopause action plans in NI.

Establishment of Fair Work Agency

A new state enforcement body, called the Fair Work Agency (FWA) will be established on 7 April 2026. It is unclear when it will become fully operational, but it will be able to enforce statutory payments dating from December 2025 (when the ERA was enacted).

The FWA will take over enforcing employment law in areas covered by existing agencies including modern slavery, gangmasters licensing, operation of agencies and employment businesses, sick pay and minimum wage. It will also gain new powers to enforce holiday pay, which is notoriously difficult for employers to calculate and currently not enforced by the state at all.

The FWA will have extensive powers to enforce statutory payments, impose penalties and recover its enforcement costs. It will also have the power to bring employment tribunal claims on most employment matters, which it will presumably use in relation to claims where it does not have direct enforcement powers.

Employers should review their approach to minimum wage, sick pay and holiday pay compliance ahead of the FWA getting up and running. We have written in detail about the FWA here.

The position in relation to the jurisdiction of the Fair Work Agency in Northern Ireland is complicated and nuanced. It appears that some provisions, but not all, will apply in NI but the wording around this in the Employment Rights Act is unclear. For now, it is likely that it will apply to underpayments of NMW, sick pay and potentially holiday pay, with the same penalties and enforcement powers as in GB but clarification is needed.

Umbrella tax compliance

From 6 April 2026, there will be a change to the ultimate obligation to account for PAYE/NICs when an umbrella company is involved in engaging an individual. In short, the end client and umbrella company will be jointly and severally liable for PAYE/NICs, unless there is a UK agency in the chain, in which case the UK agency and umbrella company will be jointly and severally liable.

In light of these changes, organisations should check if umbrella companies are being used in their labour supply chains. If so, they should carry out due diligence and regular audits to make sure any umbrella companies are complying with PAYE/NICs obligations, consider boosting their contractual protections using warranties and indemnities and, if appropriate, take out tax insurance to mitigate exposure.

This will not apply to NI and no similar reforms are currently proposed.

Summary

April 2026 marks a particularly busy period for employment law changes in GB, and employers will need to be prepared to navigate them. The pace of reform is set to continue throughout the year and into 2027, with many more significant updates on the horizon as the ERA is implemented. For further detail on these developments, and guidance on how to prepare, you can explore our ERA dashboard and/or contact our team of specialist employment lawyers.

Authors