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Employment Rights Act 2025: The April 2026 HR Guide

29-03-2026

Significant regulatory shifts are on the horizon for human resources departments across the United Kingdom. As workforce dynamics evolve, new legislative frameworks like the Employment Rights Act 2025 compliance require HR Leaders to drastically adapt their compliance strategies, operational processes, and data analytics capabilities. The Employment Rights Act 2025 introduces sweeping changes that will fundamentally alter how medium to large organisations manage their employees.

Understanding these impending regulations is critical for leadership teams tasked with driving data-driven HR practices. With commencement dates rapidly approaching in April 2026, the cost of non-compliance has never been higher. From complex alterations to sick pay calculations to heightened penalties for failures in redundancy consultation, these updates demand seamless system integration and proactive workforce management.

Organisations that successfully anticipate these requirements will do more than just avoid severe financial penalties. They will leverage advanced analytics dashboards and predictive employee insights to optimise HR processes, benchmark against industry leaders, and ultimately enhance workplace satisfaction. Here is exactly what you need to know to prepare your systems and your workforce for the upcoming changes.

Executive Summary: Preparing for April 2026

The government has finalised the latest implementation steps for the Employment Rights Act 2025 (ERA 2025) through the Commencement No 2 and No 3 Regulations. These regulations activate several crucial provisions on the 1st, 6th, and 7th of April 2026.

For organisations with 500 or more employees, these changes represent a massive shift in administrative responsibilities. The legislation touches almost every aspect of the employee lifecycle. Key focal points include the complete overhaul of Statutory Sick Pay (SSP), expanded whistleblower protections, doubled protective awards for collective redundancies, and the establishment of a powerful new enforcement body. Updating your HR systems to automate these new compliance standards will be essential for maintaining operational efficiency.

The Statutory Sick Pay (SSP) Revolution

Managing employee absenteeism is about to require significantly more robust data tracking. Section 10 of the ERA 2025 effectively abolishes the traditional three-day waiting period for SSP. Starting 6 April 2026, eligible employees will be entitled to statutory sick pay from day one of their sickness absence.

Furthermore, Section 11 removes the Lower Earnings Limit (LEL). Previously, employees needed to earn at least the LEL to qualify for sick pay. The removal of this threshold means a much wider segment of your workforce will immediately become eligible for SSP. HR departments must ensure that their real-time engagement metrics and absence-tracking systems are fully integrated and can handle a higher volume of claims without creating administrative bottlenecks.

The New SSP Calculation Rules

To prevent situations where SSP payouts exceed a worker’s actual earnings, the legislation introduces a new calculation method for lower earners. The weekly SSP rate will now be the lower of the prescribed weekly rate (set to increase to £123.25 on 6 April 2026) or 80% of the employee’s normal weekly earnings.

Navigating the transition period will require precise predictive modelling and access to accurate historical data. The regulations include specific transitional protections for employees whose sickness absence spans before and after the 6 April 2026 deadline:

Waiting Days: Employees serving waiting days prior to 6 April will not receive back pay for those days, but will be eligible for SSP for qualifying days from 6 April onwards.
Earning £125 to £154.05: Workers already receiving SSP before the deadline, whose earnings fall within this bracket, are protected. They will receive the new £123.25 rate for their protection period, rather than facing a reduction under the 80% rule.
Previously, below the LEL: Employees off sick before 6 April who did not qualify for SSP due to earning below the LEL will become entitled to SSP based on their normal weekly earnings prior to their absence.

Strengthening Worker Protections

The ERA 2025 vastly expands employee protections, requiring HR leaders to implement rigorous tracking and reporting protocols. From 6 April 2026, the definition of a “qualifying disclosure” for whistleblowing is amended to explicitly include disclosures that sexual harassment has occurred, is occurring, or is likely to occur.

The government is also empowering the Secretary of State to restrict the enforcement of non-disclosure agreements (NDAs) related to harassment and discrimination, extending these protections to independent contractors and trainees.

Additionally, Section 33 mandates that employers with 250 or more employees must develop and publish equality action plans. These plans must detail steps taken regarding gender equality. Tracking real-time engagement metrics and benchmarking against diversity standards will be vital to accurately populate these mandatory reports.

Termination and Redundancy Changes

Restructuring a workforce post-merger or during a contraction will entail significantly higher financial risks. Section 30 of the ERA 2025 increases the maximum protective award for a failure to collectively consult under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. The penalty has doubled from 90 days’ to 180 days’ pay.

The legislation also addresses “fire and rehire” practices. New regulations will specify the stringent criteria employment tribunals must assess when an employer cites “financial difficulties” as a reason to dismiss an employee with the intention of replacing them on new terms. Predictive turnover models and advanced scenario planning will be crucial for HR directors to evaluate the cost implications of workforce reorganisations before initiating any collective redundancies.

The Fair Work Agency (FWA)

A major cornerstone of the ERA 2025 is the consolidation of enforcement powers. On 7 April 2026, the Fair Work Agency (FWA) will officially begin operating on behalf of the Secretary of State. The FWA will monitor and enforce compliance across a wide range of specified labour market legislation, including the National Minimum Wage Act, the Employment Agencies Act, and the Gangmasters (Licensing) Act.

The FWA wields significant investigatory authority. Enforcement officers can demand documents, enter commercial premises, issue notices of underpayment, and secure labour market enforcement (LME) undertakings and orders. Penalties for non-compliance, obstruction, or the provision of false information are severe. HR leaders must ensure total data accessibility and maintain immaculate records to pass potential FWA audits effortlessly.

Employer Compliance Checklist

To seamlessly integrate these legislative changes and protect your organisation from costly compliance failures, HR departments should immediately take the following steps:

Update Payroll Systems: Integrate the new day-one SSP entitlement and the 80% earnings calculation into your payroll software well before April 2026.
Audit Annual Leave Records: Implement systems to ensure compliance with new obligations under the Working Time Regulations for recording annual leave and related pay.
Draft Equality Action Plans: Begin compiling data to develop and publish the required gender equality action plans.
Review Redundancy Protocols: Update collective consultation guidelines to reflect the significant financial risk posed by the new 180-day protective award.
Revise NDA and Whistleblowing Policies: Ensure all confidentiality agreements and grievance procedures align with the updated definitions of qualifying disclosures.