The Employment Rights Act 2025: What Every Business Owner Needs to Know Right Now
The Employment Rights Act 2025 is here — and if you run a business, employ even one member of staff, or work as a sole trader who occasionally brings in contractors, this affects you. From 6th April 2026, some of the biggest changes to UK employment law in a generation have come into force, and the rules around sick pay, family leave, trade unions, whistleblowing, and redundancy have all shifted significantly.
The good news? None of this needs to feel overwhelming. This guide breaks down exactly what's changed, what it means for your business, and — most importantly — what you actually need to do about it.
Let's get into it.
The Employment Rights Act 2025 is here — and if you run a business, employ even one member of staff, or work as a sole trader who occasionally brings in contractors, this affects you. From 6th April 2026, some of the biggest changes to UK employment law in a generation have come into force, and the rules around sick pay, family leave, trade unions, whistleblowing, and redundancy have all shifted significantly.
The good news? None of this needs to feel overwhelming. This guide breaks down exactly what's changed, what it means for your business, and — most importantly — what you actually need to do about it.
Let's get into it.
Why This Matters: The Bigger Picture
The Employment Rights Act 2025 was designed to shift the balance of power slightly more in favour of workers. The government's aim was to create a more secure, fairer working environment — particularly for those in lower-paid roles or precarious employment. For business owners, that means some of the protections that previously kicked in only after an employee had been with you for months or years now apply from day one.
This isn't about punishing businesses. Done well, stronger employment rights support better retention, improve morale, and help you attract good people. But you do need to know what's changed — because getting it wrong can be costly.
What's Changed From 6th April 2026
1. Statutory Sick Pay: No More Waiting Days
This is one of the most practical and immediate changes for employers of all sizes.
Previously, employees had to be off sick for three days before Statutory Sick Pay (SSP) kicked in. Those first three days — known as "waiting days" — were unpaid. From 6th April 2026, that's no longer the case. SSP is now payable from the very first day of absence.
There's also another significant change: the lower earnings limit has been removed. Previously, employees needed to earn at least £123 per week to qualify for SSP. That threshold is now gone, meaning all employees qualify for SSP regardless of their earnings level.
What you need to do:
Update your sickness absence policies immediately to reflect day-one SSP
Inform your payroll team or provider of this change — it affects calculations from the first day of any absence
Review contracts and staff handbooks to remove any reference to waiting days
If you employ part-time or low-income staff, be aware that your SSP liability has increased
For sole traders who take on employees or workers, make sure you've factored this into your financial planning. The cost of short-term sickness absence has effectively increased for all employers.
2. Paternity Leave Is Now a Day-One Right
Previously, employees needed to have been with you for at least 26 weeks before they could take statutory paternity leave. From 6th April 2026, that qualifying period is gone. Paternity leave is now a day-one right.
This means a member of staff who joins your team on Monday and whose partner gives birth three weeks later is entitled to statutory paternity leave from the start of their employment.
What you need to do:
Update your paternity leave policy to reflect the removal of the qualifying period
Make sure your contracts and offer letters no longer reference a 26-week qualifying threshold
Brief your line managers and HR team (or whoever handles leave requests) on this change
3. Unpaid Parental Leave: Also a Day-One Right
Like paternity leave, unpaid parental leave previously required 12 months of service before an employee could take it. That requirement has also been removed.
Unpaid parental leave — which allows parents to take up to 18 weeks of unpaid leave per child (up to a maximum of 4 weeks per year) — is now available from the first day of employment.
What you need to do:
Revise your parental leave policy
Remove any qualifying service requirement from your contracts and employee handbook
Think practically about how you'll manage short-notice leave requests — consider building a clearer process for requesting and approving parental leave
4. New Bereavement Leave for Partners
A new and compassionate change has been introduced for partners of parents. If a child's mother or primary adopter dies, their bereaved partner is now entitled to up to 52 weeks of unpaid leave to care for any surviving children. This is available from day one of employment, regardless of length of service.
This is an important entitlement to be aware of, even if you hope it never applies to anyone in your team.
What you need to do:
Add this entitlement to your bereavement and family leave policies
Make sure managers are briefed sensitively — this is a compassionate provision and should be handled with care
Consider whether you want to offer any enhanced support beyond the statutory minimum
5. Record-Keeping: A New Legal Duty
This one catches a lot of employers off guard. From 6th April 2026, employers are now legally required to keep records of annual leave entitlements and pay — and to retain those records for six years.
Failing to comply is now a criminal offence, punishable by a fine.
What you need to do:
Audit your current record-keeping practices — are you accurately recording annual leave taken and owed?
Implement or upgrade your holiday tracking system (a simple spreadsheet can work for small businesses, but HR software will give you more protection)
Ensure you're recording pay correctly and can evidence compliance
Set a retention schedule so records are kept for the full six-year period
This is a step many businesses have been slow to take seriously — don't be one of them.
6. Redundancy Protections: Doubled Penalties
If you're ever in the difficult position of making collective redundancies (meaning 20 or more staff within 90 days), the stakes just got higher.
The maximum protective award — the penalty for failing to carry out proper collective redundancy consultation — has been doubled. It was previously capped at 90 days' pay per affected employee. It is now 180 days' pay per affected employee.
This is a significant financial risk for businesses that get the process wrong.
What you need to do:
If you're considering redundancies, seek professional HR or legal advice before doing anything
Familiarise yourself with the collective redundancy consultation process (and the 45-day consultation period for 100+ redundancies)
Document everything. Good record-keeping is your best protection in any redundancy situation
7. Whistleblowing: New Protections for Sexual Harassment Disclosures
The Act has introduced a new category of protected disclosure under whistleblowing law. Workers who raise concerns about sexual harassment are now entitled to full whistleblowing protections — meaning they cannot be dismissed or subjected to any detriment as a result of making that disclosure.
This builds on the existing duty on employers to take reasonable steps to prevent sexual harassment in the workplace, which came into force in October 2024.
What you need to do:
Review your whistleblowing policy to ensure it covers sexual harassment disclosures
Make sure your anti-harassment policy is up to date and clearly communicated to all staff
Provide training for managers on how to handle disclosures appropriately
Document any steps you've taken to prevent harassment — this will be important if a claim is ever made
8. Trade Union Changes: A Simpler Recognition Process
For businesses with employees who are members of trade unions, the statutory recognition process has been simplified. Previously, unions had to demonstrate that a majority of workers in the bargaining unit were likely to support recognition — and even if a ballot was triggered, they needed 40% of all eligible workers to vote in favour (not just a majority of those who voted).
Both of those barriers have now been removed. Unions now only need a simple majority of votes cast to secure statutory recognition.
What you need to do:
If you have or are likely to have union activity in your business, take legal or HR advice
Be proactive about your employee relations — a positive working culture and open communication often reduces the likelihood of formal union activity
If a union does approach you for recognition, understand the process and your obligations before responding
What Does This Mean for Sole Traders?
If you're a sole trader, you might be thinking: "I don't have employees, so does any of this apply to me?"
The direct answer is: some of it might. If you ever engage workers — even casually, even on a self-employed basis — it's worth taking a step back and checking whether those working arrangements might actually make them employees or workers under UK law. Employment status is complex, and getting it wrong exposes you to significant liability.
Even if you're genuinely solo right now, if you're planning to grow and bring people on board, you'll want to build HR processes that are compliant with the new rules from day one. Getting things right from the start is always easier than retrofitting.
Your Action Checklist
Here's a practical summary of what business owners should prioritise right now:
Immediate priorities (do these now):
Update your SSP policy — day one entitlement, no lower earnings limit
Remove the qualifying period from your paternity and parental leave policies
Implement or upgrade your annual leave and pay record-keeping system
Review and update your whistleblowing policy to include sexual harassment
Short-term priorities (within the next 30 days):
Update your employee handbook and any relevant contracts
Brief your managers and HR function on all changes
Add the new bereavement leave provision to your policies
If you have employees earning below the old SSP threshold, review your payroll setup
Ongoing:
Keep across future phases of the Employment Rights Act 2025 — more changes are expected in 2026 and beyond
Consider working with an HR professional to ensure ongoing compliance
You've Got This — And We're Here If You Need a Hand
There's a lot to take in, but most of these changes are straightforward to implement once you know what you're dealing with. A few policy updates, a conversation with your payroll provider, and a refresh of your employee handbook will take care of the majority of it.
At HiThrive, we're business consultants first and foremost — we help owners and managers run better, more resilient businesses. That includes helping you make sense of changes like these, thinking through what they mean for your specific situation, and pointing you in the right direction when specialist HR or legal advice is needed.
If you'd like a sounding board, some practical guidance, or just a plain-English conversation about what any of this means for your business — we'd love to chat.
Get in touch and let's talk it through.
Summary: Employment Rights Act 2025 — Key Changes From 6th April 2026
What is the Employment Rights Act 2025? The Employment Rights Act 2025 is a major piece of UK legislation that introduces significant reforms to employment law. It was passed in 2025 and its first wave of changes came into force on 6th April 2026.
What are the main changes from 6th April 2026?
The key changes that came into force on 6th April 2026 include:
Statutory Sick Pay (SSP): SSP is now payable from day one of absence (the three waiting days have been abolished). The lower earnings limit has been removed, so all employees qualify regardless of earnings.
Paternity leave: Now a day-one right. Employees no longer need 26 weeks of service to qualify.
Unpaid parental leave: Now a day-one right. The previous 12-month qualifying period has been removed.
Bereaved partner leave: Bereaved partners of a child's deceased mother or primary adopter can take up to 52 weeks of unpaid leave, available from day one of employment.
Annual leave record-keeping: Employers must now keep records of annual leave entitlements and pay for six years. Failure to comply is a criminal offence.
Redundancy consultation penalties: The maximum protective award for failing to comply with collective redundancy consultation obligations has doubled from 90 to 180 days' pay per affected employee.
Whistleblowing: Sexual harassment disclosures are now a protected category, giving workers who raise concerns full whistleblowing protection.
Trade union recognition: The statutory recognition process has been simplified. Unions now only need a simple majority of votes cast, and the 40% support threshold has been removed.
Who do these changes affect? These changes affect all UK employers, regardless of size — including small businesses, SMEs, and sole traders who engage workers or employees.
What should employers do right now? Employers should update their HR policies, contracts, and employee handbooks to reflect the new legislation; ensure their payroll is set up to pay SSP from day one; implement proper annual leave record-keeping systems; and seek professional HR advice to ensure full compliance.
