The 6th April marks the activation of the first major wave of changes under the Employment Rights Act 2025. Described as the most significant overhaul of UK employment law in a generation, the new rules introduce sweeping day-one rights and stricter compliance measures that immediately impact how small and medium-sized enterprises (SMEs) operate.
While further reforms will continue to roll out into late 2026 and 2027, today is a critical milestone for businesses and their employees. If you have not yet updated your payroll, absence management protocols, and employment contracts, the time to act is right now.
Here is a breakdown of some of the things that change for your business as of today, and what you need to do to remain compliant.
The key changes in force from today
As your staff log on or clock in today, they are operating under a new set of statutory rights. The most pressing updates include:
- Statutory sick pay (SSP) overhaul: The three-day waiting period and the lower earnings limit are officially gone. All workers, regardless of their earnings or part-time status, are now entitled to SSP from their very first day of sickness absence (instead of the fourth day). Furthermore, the weekly flat rate has increased and is 80% of the employee’s average weekly earnings or £123.25, whichever is lower.
- Expanded day-one family rights: The previous qualifying periods for paternity leave (formerly 26 weeks) and unpaid parental leave (formerly one year) have been abolished. Employees can now legally request both from their first day of employment.
- Bereaved partner’s paternity leave: In a sensitive addition to family rights, surviving partners are now entitled to up to 52 weeks of leave if the mother or primary adopter passes away, also effective as a day-one right.
- Whistleblowing and sexual harassment: Protections for whistleblowers have been explicitly extended to cover workers who raise concerns regarding sexual harassment, safeguarding them against dismissal or detrimental treatment.
- Stiffer penalties for redundancy missteps: For businesses making 20 or more staff redundant within a 90-day window, the maximum protective award for failing to consult collectively has just doubled to 180 days’ pay per employee.
- National living wage ripple effects: Following the minimum wage increase to £12.71 per hour for workers aged 21 and over on 1 April, businesses must closely monitor pay structures. Wage compression between new starters and experienced staff is a serious risk that can rapidly erode team morale.
To oversee these new regulations, the government has set up the Fair Work Agency. This central enforcement body has the authority to inspect business premises and audit HR documentation, signalling a zero-tolerance approach to non-compliance from day one.
The immediate business action plan
If your business is playing catch-up, the good news is that these changes primarily require updates to existing processes rather than starting entirely from scratch. You should urgently focus on the following four areas:
- Audit contracts and handbooks: Remove old qualifying periods for family leave in all new and existing documentation. Update SSP terms to reflect day-one entitlement, and ensure your whistleblowing policies explicitly cover sexual harassment.
- Verify payroll systems: Confirm with your payroll provider that SSP waiting periods have been removed and the new National Living Wage rates are successfully applied. Crucially, ensure that salary sacrifice schemes do not inadvertently drop employees below the new minimum thresholds.
- Train management: With day-one rights now a reality, line managers are on the front lines of compliance. Briefing them on how to handle immediate flexible working requests or day-one sick leave from new starters is essential to avoid tribunal risks.
- Strengthen absence tracking: As more staff qualify for immediate sick pay, robust absence reporting and return-to-work procedures are vital for managing increased costs and identifying patterns early.
Prepare for future changes
SMEs must also look further ahead, as the qualifying period for claiming unfair dismissal is planned to drop from two years to just six months in January 2027. Consequently, any staff you hire from July 2026 onwards will be subject to this tighter timeline, making rigorous probation and performance management processes an absolute necessity.
Additionally, protections against third-party harassment by customers or clients are expected in October 2026, alongside upcoming reforms to zero-hours contracts.
The Employment Rights Act 2025 is a massive shift, but it is a manageable one. By securing your foundations today, your business will be in a much stronger position to navigate the evolving employment landscape.
