The Employment Rights Act 2025 became law on 18th December 2025. Most changes are coming into play from April 2026. The Fair Work Agency will monitor compliance and ensure that employers are adhering to the new rules. We have outlined some key changes that will affect your payroll and how.
Paternity leave and ordinary parental leave – from April 2026
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Employees will be eligible for paternity leave from day one, meaning they can give notice of leave to their employers on their first day of employment. Currently an employee must have worked a minimum of 26 weeks before being eligible.
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Similarly, ordinary parental leave, or unpaid parental leave, will also be available to employees from day one. Currently an employee must have worked for their employer for 1 year to be eligible
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There will be no restriction on taking paternity leave after shared parental leave
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Eligible fathers and partners are entitled to up to 52 weeks of unpaid leave if the mother or primary partner dies. To qualify, this time off must be taken within the first 52 weeks following the child’s birth or adoption (including surrogacy and overseas adoptions).
Sick pay – from April 2026
- Statutory sick pay (SSP) will be paid from day 1 of absence: currently SSP is paid on the fourth consecutive day of absence.
- Removal of earnings threshold of £123 per week: employees on all earnings will be eligible for SSP
- New calculations for SSP: payments will be based on the lower of 80% of average weekly earnings or the standard SSP rate which is £123.25 per week for 2026/27
Tipping – from October 2026
- Employers must consult with workers or their representatives before creating a tipping policy
- Employers must update their tipping policy every 3 years
Unfair Dismissal – From January 2027
- The qualifying period for unfair dismissal protection will drop from 2 years to 6 months.
- The current limit on compensatory awards for unfair dismissal will be removed.
Gender pay gap and menopause action plans – mandatory from 2027
Employers must create action plans to solve menopause and gender pay gaps. These will be voluntary from 6 April 2026. They will become mandatory sometime in 2027.
Zero Hours Workers – from 2027
- The number of hours that a worker regularly works must be stipulated in their contract based on a reference period. This is expected to be 12 weeks (tbc)
- Workers must be notified within a reasonable period of time of their shift pattern along with any changes.
- If shifts are moved, cancelled or curtailed at short notice, employers must pay for these.