UK Employment Law Changes Now in Force: What Start-Ups and Small Businesses Need to Know

If you employ staff in the UK — or you are planning to soon — there are several important employment law changes now in force that you should not ignore.

The biggest updates took effect on 6 April 2026, with further enforcement changes beginning on 7 April 2026. For start-ups and growing businesses, this is not just an HR issue. It affects onboarding, payroll, sickness procedures, family leave, record-keeping and overall compliance.

The good news is that not every change will affect every business immediately. But if you employ people, now is the right time to review your policies and make sure your systems match the new rules.

1) Statutory Sick Pay has changed

From 6 April 2026, Statutory Sick Pay (SSP) is more accessible than before. The previous lower earnings limit has been removed, and eligible workers no longer need to wait until the fourth day of sickness absence before SSP starts. In practice, that means sick pay can now apply from day one of illness, and more lower-paid workers may qualify than under the previous rules. Acas also states that SSP for 2026/27 is £123.25 per week or 80% of average weekly earnings, whichever is lower.

For employers, this means your absence reporting process, payroll settings and manager guidance should all be checked. If your current internal process still refers to “waiting days” or says workers must earn above a minimum threshold to qualify, it may now be out of date.

2) Paternity leave is now a day-one right

Another major change is that paternity leave is now available from the first day of employment. Before this change, employees needed 26 weeks’ service with their employer to qualify for the leave itself. That qualifying period for leave has now gone.

There is one important distinction, though: Statutory Paternity Pay has not become a day-one right. Government guidance confirms that the 26-week service requirement for paternity pay remains in place, even though eligibility for the leave itself now starts from day one.

For small businesses, this matters because your contracts, staff handbook and leave policy should clearly separate entitlement to leave from entitlement to statutory pay.

3) Unpaid parental leave is now also a day-one right

From 6 April 2026, unpaid parental leave is also available from day one of employment. This is another change designed to give working parents more flexibility earlier in their employment.

For employers, the practical impact is simple: do not assume newer employees are automatically excluded from this kind of request anymore. Line managers and anyone handling HR admin should understand that service-based eligibility has changed.

4) Bereaved Partner’s Paternity Leave is now in force

A new right called Bereaved Partner’s Paternity Leave also came into effect on 6 April 2026. GOV.UK says this applies where the mother, main adopter or main intended parent dies within the child’s first year, and eligible employees can take unpaid leave up until the child’s first birthday or the first anniversary of adoption placement. Business.gov.uk says the entitlement can be up to 52 weeks, depending on when the bereavement occurs, and that this is a day-one right.

This is a sensitive area, but it still needs a clear internal process. Even very small businesses should have a simple approach for handling these situations compassionately and consistently.

5) Collective redundancy penalties have increased

If your business is nowhere near a collective redundancy situation, this may feel less urgent. But it is still worth knowing that from 6 April 2026 the maximum protective award for failing to comply with collective redundancy consultation obligations has increased from 90 days’ pay to 180 days’ pay.

For most start-ups, this will not be an immediate concern. But for growing teams, restructures and rapid scaling, it is another reminder that employment law risk grows as headcount grows.

6) Sexual harassment disclosures now have stronger whistleblowing protection

From 6 April 2026, sexual harassment became a qualifying disclosure under whistleblowing law. Acas says this means workers who report sexual harassment can have protection from detriment and unfair dismissal under whistleblowing rules.

That means employers should not only have an anti-harassment policy, but also make sure reporting channels are clear, safe and taken seriously. A complaint raised in this area must be handled properly, documented carefully and never treated as an inconvenience.

7) Employers now need stronger holiday pay records

Government guidance also says employers must keep adequate records showing compliance with holiday pay and holiday entitlement rules, and that these records should be retained for 6 years from the date they were made.

For founder-led businesses, this is a practical compliance point. If holiday is still tracked informally in messages, spreadsheets with no audit trail, or verbal agreements, it may be time to tighten that up.

8) A new Fair Work Agency launched on 7 April 2026

Alongside the legal changes that took effect on 6 April, the new Fair Work Agency launched on 7 April 2026. Government guidance says it brings together enforcement of key employment rights in one place and is intended to make guidance and support easier for compliant employers to access.

For good employers, that should mean a clearer enforcement landscape. But it also means there is likely to be less room for casual non-compliance or outdated practices.

What small businesses should do now

For most start-ups and SMEs, the right response is not panic — it is a practical review.

Start with these five areas:

1. Update your staff handbook and leave policies

Check paternity leave, unpaid parental leave, bereavement-related leave, sickness absence and whistleblowing wording.

2. Review payroll settings

Make sure SSP is being handled correctly under the new rules and that statutory payment rates are up to date for 2026/27. HMRC’s employer guidance shows statutory family-payment weekly rates of £194.32 for the relevant 2026/27 payments, subject to the usual earnings-based cap, and SSP at £123.25 or 80% of average weekly earnings, whichever is lower.

3. Train managers

Anyone approving leave, managing sickness or handling complaints should understand the new rules.

4. Improve record-keeping

Holiday, sickness, family leave requests and complaint handling should all be recorded properly.

5. Get ahead of future changes

Government guidance says more reforms are still being rolled out across 2026 and 2027, including unfair dismissal changes from 1 January 2027.

Final thought

Employment law is moving quickly, and for small businesses the biggest risk is often not deliberate non-compliance — it is running on old documents, old assumptions and old processes.

If you are hiring, growing a team, or cleaning up how your business operates, this is a good time to review your people policies and make sure your foundations are strong. Getting this right early is usually far easier — and far cheaper — than fixing it later.

Need help getting your policies, payroll processes or business systems ready? Launch Start-Up helps founders and growing businesses put practical structure in place from day one.