Employment Law Update
2026 employment law changes: what UK employers need to know
2026 brings a mix of rate changes (wages and statutory payments) and a phased programme of wider reforms following the Employment Rights Act 2025. Below is an employer-friendly summary of the key dates, new rates, and the practical actions to consider.
- From 1 April 2026: National Living Wage / National Minimum Wage increases across all bands.
- From 6 April 2026: family-friendly statutory payments increase (weekly cap to £194.32 after the first 6 weeks).
- From 6 April 2026: SSP increases to £123.25 per week and becomes a day-one entitlement (waiting days removed; lower earnings limit removed).
- From April 2026: day-one rights to paternity leave and unpaid parental leave under the Employment Rights Act 2025, plus a new Fair Work Agency.
- From October 2026: ban on “fire and rehire” (limited exceptions), tribunal time limits extend to six months, and stronger trade union rights.
- From 1 January 2027: unfair dismissal qualifying period reduces from two years to six months (with more reforms expected through 2027).
National Living Wage & National Minimum Wage
New minimum wage rates apply from 1 April 2026 across all age bands, plus the accommodation offset.
- Age 21+ (National Living Wage): £12.71 per hour (up from £12.21).
- Age 18–20: £10.85 per hour (up from £10.00).
- Age 16–17: £8.00 per hour (up from £7.55).
- Apprentice: £8.00 per hour (up from £7.55).
- Accommodation offset: £11.10 per day (up from £10.66).
Family-friendly payments: new weekly cap
From 6 April 2026, the weekly cap rises to £194.32 after the first 6 weeks for qualifying statutory payments.
- Statutory Maternity Pay & Statutory Adoption Pay: 39 weeks at 90% of earnings, capped at £194.32 after week 6.
- Statutory Paternity Pay & Shared Parental Pay: lower of £194.32 or 90% of average weekly earnings.
- Parental Bereavement Pay: lower of £194.32 or 90% of average weekly earnings.
- Neonatal Care Pay: lower of £194.32 or 90% of average weekly earnings.
- Average earnings threshold to qualify for SMP and related payments rises to £129.00 per week.
Statutory Sick Pay: higher rate + day-one eligibility
From 6 April 2026, SSP increases to £123.25 per week. Under the Employment Rights Act 2025, SSP also becomes a day-one entitlement with broader eligibility.
- SSP payable from day one (waiting days removed).
- Lower Earnings Limit removed, extending SSP eligibility to all workers.
- For those earning below the previous LEL, SSP is expected to be the lower of 80% of average weekly earnings or the flat rate.
Statutory caps & Vento bands
Each April, statutory limits and compensation guidance are updated. Plan for revised figures from 6 April 2026.
- The statutory cap on a week’s pay (used for redundancy and tribunal calculations) will be updated for April 2026.
- Vento bands (injury to feelings awards) are re-assessed annually, with changes expected from April 2026.
- Collective redundancy: protective award is expected to double under the Employment Rights Act changes in April 2026.
Day-one leave rights + new enforcement body
The Employment Rights Act 2025 introduces phased reforms through 2026–2027. Key changes expected from April 2026 include:
- Day-one entitlement to paternity leave and unpaid parental leave.
- Fair Work Agency established to enforce employment rights, including holiday pay enforcement.
- Sexual harassment added to matters capable of amounting to a protected disclosure (whistleblowing).
- Streamlined trade union recognition process.
- Voluntary period begins for large employers (250+ staff) on gender pay gap and menopause action plans, ahead of mandatory publication in 2027.
October 2026 reforms and the 2027 shift
Further significant changes are expected later in 2026 and into 2027, affecting contract strategy, dispute risk, and workforce planning.
- October 2026: ban on “fire and rehire” (limited exceptions), new statutory code, stronger union access and information duties, and tribunal claim time limits extending from 3 to 6 months.
- October 2026: enhanced protections around sexual harassment (including third-party harassment) and strengthened detriment protections linked to industrial action.
- 1 January 2027: unfair dismissal qualifying period reduces to six months.
- 2027 (expected, subject to consultation): zero-hours contract reform, flexible working changes, and potential removal of the unfair dismissal compensation cap.
What employers should do now
Build the 2026–2027 implementation dates into budgets and workforce planning. Update payroll rates for April, review absence processes for day-one SSP, and schedule HR/manager training before October’s reforms. If you rely on low-hours working patterns, start reviewing exposure ahead of expected 2027 changes.
Need help aligning payroll and HR processes? We can support you.
Gender pay gap reporting deadlines (2026)
Employers with 250+ employees should also plan for the annual reporting deadlines: public sector deadline 30 March 2026 (snapshot 31 March 2025), and private/voluntary sector deadline 4 April 2026 (snapshot 5 April 2025).
Tip: make sure payroll and HR data owners agree the same headcount and snapshot approach.
2026 employment law FAQs
When do the 2026 statutory rate changes take effect?
Minimum wage rates change from 1 April 2026. Most statutory payment rate changes (including family-friendly payments and SSP) apply from 6 April 2026.
What is the new SSP rate and what’s changing about eligibility?
SSP increases to £123.25 per week from 6 April 2026. It also becomes payable from day one of sickness absence, and the lower earnings limit is removed so more workers qualify.
What is the new weekly cap for statutory maternity/adoption pay?
From 6 April 2026, the weekly cap increases to £194.32 (after the first six weeks, where the rate is 90% of earnings). Similar caps apply to paternity pay, shared parental pay, parental bereavement pay and neonatal care pay.
Which Employment Rights Act 2025 changes start in April 2026?
Key April 2026 reforms include day-one rights to paternity leave and unpaid parental leave, day-one SSP, and the creation of a new Fair Work Agency to help enforce employment rights.
What changes are expected in October 2026?
October 2026 reforms are expected to include a ban on “fire and rehire” (with limited exceptions), longer tribunal claim time limits (moving to six months), and stronger trade union access and information rights.
How should employers prepare for the 1 January 2027 unfair dismissal change?
Review probation, performance management, and dismissal processes now. With the qualifying period reducing to six months, dismissal risk can arise earlier—so documentation, training, and consistency become even more important.