The first wave of reforms under the Employment Rights Act 2025 is fast approaching. These changes to UK employment law will have wide-ranging implications for both employers and workers.
For growing recruitment businesses, this means two things:
- understanding how the changes affect your own internal hiring and employment practices
- being able to confidently support clients with workforce planning, risk management, and future hiring decisions.
Here’s what’s happening and when:
April 2026: The First Major Phase
April 2026 will introduce a broad package of reforms affecting pay, leave entitlements, and regulatory enforcement.
Key changes include:
Statutory pay increases
Rates will rise across the board, including the National Minimum Wage for all age bands, family-related leave payments, and Statutory Sick Pay (SSP).
Statutory Sick Pay reform
SSP will become a day-one entitlement for all workers, with the removal of the lower earnings limit. Payments will be set at 80% of average earnings or the flat SSP rate (whichever is lower).
These changes are likely to increase both employment costs and administrative demands, particularly for lower-paid or short-term staff.
Day-one leave rights
Paternity leave and unpaid parental leave will become available from the first day of employment, removing the current 26-week qualifying period.
Creation of the Fair Work Agency
This new body will have extensive powers to enforce compliance, support employment tribunals, and pursue underpayment and other breaches.
National Minimum Wage increases
- £12.71 (age 21 and over)
- £10.81 (ages 18–20)
- £8.00 (ages 16–17 and apprentices)
Extended whistleblowing protections
Public interest disclosures relating to sexual harassment will receive enhanced protection.
October 2026: High-Impact Employer Obligations
Further significant reforms are expected in October, creating additional responsibilities for employers.
These include:
Fire and rehire restrictions
Dismissals for the purpose of changing contractual terms will be automatically unfair unless the employer can demonstrate a strict financial necessity.
Stronger duties on sexual harassment prevention
Employers will have a heightened legal responsibility to prevent harassment.
New liability for third-party harassment will increase risk in customer-facing environments.
Tribunal and trade union rights
Time limits for tribunal claims will increase from three months to six months.
Employers will also be required to inform workers of their right to join a trade union.
Tips and gratuities reform (particularly relevant to hospitality recruiters)
Enhanced obligations and transparency around the fair allocation of tips will build on existing legislation.
January 2027: Unfair Dismissal Reform
The qualifying period for unfair dismissal claims will reduce from two years to six months.
Importantly, this change will apply retrospectively, meaning employers could see increased exposure to claims much sooner than expected.
What Recruiters Should Do Now
The most effective way to protect your business and support your clients is to start preparing now:
- Review employment contracts, policies, and company handbooks
- Plan for increased statutory pay costs in budgets and charge rates
- Train managers on new rights and employer obligations
- Strengthen harassment and whistleblowing frameworks
- Reassess dismissal, consultation, and wider workforce strategies
A More Proactive Compliance Landscape
More than ever, 2026 will demand a proactive approach to compliance.
Recruitment businesses that prepare early will be best placed to:
- manage risk effectively
- build stronger client relationships
- position themselves as trusted strategic partners rather than transactional suppliers
Now is the time to speak with your HR team, legal advisers, or the team at MAYACHI to understand what support and guidance is available. With the right preparation, these changes can be navigated with confidence.
