Employment Rights Act 2025 is here – How employers can prepare their payroll

The Employment Rights Act 2025 is set to bring significant changes to UK Employment Law.

Employers are now faced with a limited window to prepare for the upcoming reforms.

What reforms will the Employment Rights Act 2025 bring?

The Employment Rights Act’s regulations will mainly come into effect on the common commencement dates of 6 April or 1 October.

From April 2026, Statutory Sick Pay (SSP) will become more accessible as the Lower Earnings Limit (LEL) and waiting period will be removed.

Paternity leave and unpaid parental leave will become day-one rights, requiring payroll and leave-tracking systems to apply statutory entitlements from the start of employment.

A new Fair Work Agency (FWA) will be established, alongside a simplified trade union recognition process, shorter employment tribunal time limits and stronger whistle-blowing and sexual harassment protections.

From October 2026, changes to tipping laws will require fair distribution of tips through payroll in sectors such as hospitality.

These reforms will have a knock-on effect and careful planning is required to stay compliant.

How can you prepare your payroll?

Be really careful that what you process in payroll is compliant with these new rules.

Check your employees’ contracts comply with the new reforms.

Record-keeping during new employees’ probation periods will be critical to reduce potential litigation risks.

Why do your payroll policies and systems need to change?

These reforms will bring additional payroll and compliance implications.

Our team can offer financial and payroll advice to help your business update systems and implement changes efficiently for when the various elements of the Act come into effect.

For expert payroll advice and support, contact our team today.

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