April 2026 Employment Law changes – A major compliance checkpoint for Employers

April 2026 marks one of the most significant tranches of Employment Law reform in recent years. A combination of reforms introduced by the Employment Rights Act 2025 (ERA 2025) and wider statutory updates will affect pay, statutory entitlements, whistleblowing protections, record‑keeping obligations and enforcement.

With further reforms already in the pipeline for the rest of the year and 2027, Employers should treat 2026 as a critical transition year. Below is a practical overview of the key changes taking effect this April and what organisations should be doing now.

From 1 April 2026, the new hourly rates are:

• National Living Wage (21 and over): £12.71 (up from £12.21)
• 18–20-year-olds: £10.85 (up from £10.00)
• 16–17-year-olds: £8.00 (up from £7.55)
• Apprentices: £8.00 (up from £7.55)

These uplifts exceed forecast inflation and represent a real‑terms pay increase for workers.

Employer action

• Audit pay structures, including for apprentices and variable‑hours workers

Review salary sacrifice arrangements to ensure minimum wage compliance

From 6 April 2026, the weekly statutory rate will increase to £194.32 (from £187.18) for:

• Statutory Maternity, Paternity and Adoption Pay
• Statutory Shared Parental Leave Pay
• Maternity Allowance
• Parental Bereavement Pay
• Statutory Neonatal Care Leave Pay

Employer action

• Update payroll systems
• Ensure HR teams apply the new rates correctly to new periods of leave

Significant changes to Statutory Sick Pay (SSP) take effect from 6 April 2026 with:

• The Lower Earnings Limit (£125 per week) will be abolished
• All employees will qualify for SSP
• SSP becomes payable from day one of sickness absence
• Weekly SSP will increase to £123.25 or 80% of normal weekly earnings, whichever is lower

Although transitional provisions apply to absences starting just before 6 April, the safest practical approach is to apply the day‑one entitlement.

Employer action

• Update sickness absence policies and contracts
• Align payroll and absence management processes
• Train managers on the new SSP framework

From 6 April 2026, qualifying service requirements will be removed for:

• Paternity leave (previously 26 weeks’ continuous service)
• Unpaid Parental leave (previously one year’s service)

Employees will be entitled to both from day one of employment, subject to the remaining eligibility criteria. Employees will also no longer be prevented from taking paternity leave after shared parental leave, increasing flexibility for families.

Employer action

• Update family leave policies and templates
• Ensure managers understand the revised eligibility rules

For dismissals taking effect on or after 6 April 2026, tribunal limits will increase to:

• Maximum compensatory award (unfair dismissal): £123,543
• Maximum week’s pay: £751

More significantly, the ERA 2025 provides that the compensatory cap for unfair dismissal will be removed entirely for dismissals taking effect from 1 January 2027, substantially increasing financial exposure.

Employer action

• Reassess dismissal and redundancy risk
• Ensure fair processes are followed and clearly documented

Updated Vento bands were recently published and apply to compensation for injury to feelings in discrimination claims.

The new bands

• Lower band: £1,300 to £12,600
• Middle band: £12,600 to £37,700
• Upper band: £37,700 to £62,900

Exceptional cases may exceed the upper band.

Employer action

• Treat discrimination complaints proactively
• Review equality, harassment and training frameworks

From 6 April 2026, the definition of a protected disclosure in whistleblowing legislation will be expanded.

As a result, employees who report sexual harassment may benefit from enhanced whistleblowing protections, including protection from detriment and dismissal.

Employer action

• Review whistleblowing and harassment policies
• Ensure clear reporting routes and non‑retaliation safeguards
• Train managers on handling overlapping whistleblowing and grievance complaints

In a late and unexpected development, regulations published on 24 March 2026 confirm that from 6 April 2026, Employers will be under a new statutory duty to keep and retain annual leave and holiday pay records.

Records must cover

• Ordinary and additional annual leave taken
• Leave carried forward from previous leave years
• Holiday pay details, including included and excluded pay elements
• Payments in lieu of annual leave

Records must be retained for six years and kept in a format the employer reasonably considers appropriate.

In due course, enforcement of holiday obligations is expected to fall within the remit of the Fair Work Agency (see below).

Employer action

• Audit current annual leave and payroll records
• Identify and rectify gaps in historic data

The Fair Work Agency (FWA) will be established on 7 April 2026. It will (over time) consolidate enforcement functions including:

• National minimum wage and SSP enforcement
• Employment Tribunal penalty enforcement
• Labour exploitation and modern slavery enforcement
• Holiday pay enforcement

Its powers will be rolled out in stages through further regulations, but Employers should expect an increasingly proactive enforcement landscape.

The reforms taking effect in April 2026 represent a profound shift in the balance of workplace rights. Worker protections are being strengthened, enforcement is becoming more centralised, and Employer compliance obligations are increasing in both scope and complexity.

Organisations that prepare early, audit their practices, and update training and documentation will be best placed to manage risk, maintain workforce stability and navigate this evolving legal landscape.