Employment law in the UK is undergoing significant reform. Changes introduced in 2025 have been followed by further measures in 2026, with more scheduled under the Employment Rights Act 2025.
For employers, this means new legal duties related to pay, leave and how you manage staff.
In this blog, we explain the key employment law changes introduced in 2025, what has changed since and what employers should prepare for next.
Most employment rights discussed below apply to Great Britain: England, Scotland and Wales. Northern Ireland has separate legislation for some employment rights. National Minimum Wage and National Insurance rules apply across the UK.
The following timeline summarises changes introduced in 2025. Updates explain where rates or requirements have changed since.
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The statutory Code of Practice on Dismissal and Re-engagement came into force on 18 July 2024. From 20 January 2025, employment tribunals gained the power to increase protective awards by up to 25% where an employer unreasonably fails to follow the Code when it applies.
Employers must consult collectively with a recognised trade union or appropriate employee representatives if they propose to dismiss and re-engage 20 or more employees at one establishment within 90 days or less.
During 2025, the maximum protective award for failing to meet collective consultation requirements was 90 days’ pay per affected employee, before any applicable adjustment.
Tribunals will expect to see evidence that you’ve followed the Code. That means clear communication, genuine consultation and proof that dismissal was a last resort.
2026 update: For dismissals taking effect on or after 6 April 2026, the maximum protective award increased to 180 days’ pay per affected employee. Employers should review consultation procedures before beginning any qualifying dismissal exercise.
From 1 April 2025, updated wage rates applied across your workforce.
The National Living Wage continued to apply to workers aged 21 and over, following the reduction in the age threshold in April 2024.
The 2025 hourly rates were:
2026 update: From 1 April 2026, the hourly minimum rates increased to £12.71 for workers aged 21 and over, £10.85 for those aged 18 to 20 and £8.00 for those under 18 and eligible apprentices.
The apprentice rate applies to apprentices under 19 and those aged 19 or over in the first year of their apprenticeship. Other apprentices must receive at least the minimum wage for their age.
Make sure you’re using the current rates for each pay period.
Your leave policies need to include the Neonatal Care Leave and Pay entitlement.
Eligible employees whose baby was born on or after 6 April 2025 can take up to 12 weeks of Neonatal Care Leave. The baby must enter qualifying neonatal care within 28 days of birth and remain in care for at least seven full consecutive days.
Leave is available from the first day of employment. Statutory Neonatal Care Pay has separate eligibility conditions, including at least 26 weeks’ continuous employment by the relevant qualifying week and a minimum earnings requirement. Make sure your HR team distinguishes between eligibility for leave and eligibility for pay.
From 6 April 2025, the cap for redundancy pay increased. If you’re handling redundancies for employees with two or more years of service, you’ll need to base their payment on weekly pay, age, and length of service as usual, but with the applicable weekly cap.
The maximum weekly pay for redundancy calculations rose to £719, up from £700.
Make sure you use the cap that applies on the date the redundancy takes effect.
2026 update: For redundancies taking effect on or after 6 April 2026, the weekly pay cap increased to £751, giving a maximum statutory redundancy payment of £22,530.
From 6 April 2025, updated statutory pay rates applied for staff on sick leave and family-related leave.
Statutory Maternity and Adoption Pay are payable at 90% of average weekly earnings for the first six weeks.
2026 update: From 6 April 2026, Statutory Sick Pay is payable from the first qualifying day of sickness, with the lower earnings threshold removed. The weekly amount is £123.25 or 80% of average weekly earnings, whichever is lower.
The standard weekly rate for statutory family-related payments, including Statutory Neonatal Care Pay, increased to £194.32, or 90% of average weekly earnings if lower. The maternity pay increase applied from 5 April 2026; the other listed payments increased from 6 April.
Organisations covered by the reporting rules with 250 or more employees on the relevant snapshot date are legally required to report their gender pay gap data annually. This obligation hinges on a specific date each year, known as the ‘snapshot date’, which varies by employer type.
(For example, a private company that employed 250 people on 5 April 2024 had to base its gender pay gap calculations on payroll data from that date and report the findings by 4 April 2025.)
Reports must be published on the organisation’s website and uploaded to the GOV.UK gender pay gap reporting portal.
You can also add a short explanation of the pay gap and describe what actions you’re taking to reduce it. This part is optional but encouraged.
Current reporting cycle: Most public authority employers covered by these reporting rules must report by 30 March 2027 using their 31 March 2026 snapshot. Private, voluntary and other covered public authority employers must report by 4 April 2027 using their 5 April 2026 snapshot. These dates follow the annual reporting timetable. Separate reporting requirements apply to certain public bodies in Scotland and Wales.
Employers with 250 or more employees can now publish voluntary action plans addressing their gender pay gap and supporting employees experiencing menopause. The government plans to make these mandatory from spring 2027, subject to secondary legislation.
From 6 April 2025, the standard employer National Insurance Contributions (NICs) rate increased from 13.8% to 15%. The annual secondary threshold also dropped from £9,100 to £5,000.
The standard employer rate remains 15% for 2026/27, with an annual secondary threshold of £5,000. Eligible employers can reduce their employer National Insurance liability through the Employment Allowance, which is £10,500 for 2026/27.
The Employment Rights Bill became the Employment Rights Act 2025 on 18 December 2025. Its provisions are being introduced in stages, so employers need to distinguish between requirements already in force and measures scheduled for later implementation.
From 6 April 2026, Paternity Leave and Unpaid Parental Leave became day-one employment rights. Statutory Paternity Pay still has separate service and earnings conditions. Employers must also retain annual leave and holiday pay records for at least six years.
For most claims concerning events on or after 1 October 2026, the tribunal time limit increased to six months minus one day. Earlier events generally remain subject to the previous three-month-minus-one-day limit. Internal grievance procedures do not pause these deadlines, although timely notification to Acas can do so during early conciliation.
The equivalent extension for breach-of-contract claims in Scotland takes effect on 9 November 2026.
The Fair Work Agency was established on 7 April 2026, bringing together key employment rights enforcement functions.
From 30 October 2026, employers must take all reasonable steps to prevent sexual harassment. New liability for third-party harassment applies where employers fail to take all reasonable steps to prevent it. Trade union access, recognition and representative rights also change.
Our guide to the Employment Rights Act changes in October 2026 explains these measures in detail.
Sexual harassment also became an express category under whistleblowing law on 6 April 2026, subject to the conditions for a protected disclosure.
For the wider legal framework and whistleblowing protections, read UK Sexual Harassment Legislation Explained. For policy content and reporting procedures, see Writing Your Sexual Harassment Policy.
Further reforms are scheduled for 2027. These include reducing the qualifying period for ordinary unfair dismissal claims to six months for dismissals from 1 January 2027, removing the cap on the compensatory award and introducing stronger fire-and-rehire protections. The separate duty to inform workers of their right to join a trade union is scheduled for January 2027.
Guaranteed-hours offers and rights concerning shift notice and short-notice changes are also planned for 2027, including provisions for agency workers.
The government has also announced a new right to unpaid bereavement leave from April 2027, including up to two weeks following pregnancy loss before 24 weeks. Implementing legislation is still required.
Employers should monitor the implementing regulations and prepare to update contracts, leave policies and staffing models as the relevant requirements take effect.
Changes to employment law need to be reflected in payroll, workplace policies and everyday management decisions. HR staff and managers need to understand how those changes affect their responsibilities and when to seek further advice.
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