New Employee Rights Every Small Business Owner Must Know in 2026

The Employment Rights Act 2025 has introduced a wave of new obligations that landed on UK employers on 6 April 2026. For small business owners and sole traders with staff, these aren't optional — they are legal requirements. Failing to comply with them could mean a visit from the new Fair Work Agency or an Employment Tribunal claim. Here's what changed and what you need to do.

1. Statutory Sick Pay From Day One — No Waiting Period

From 6 April 2026, you must pay Statutory Sick Pay (SSP) from your employee's first day of illness — the previous three-day waiting period is abolished. The lower earnings threshold for qualifying for SSP has also been removed, meaning low-paid workers who previously earned below the Lower Earnings Limit of £123/week now qualify too.

What you need to do: Update your sick pay policy immediately. Any employee who is off sick from day one now qualifies for SSP. The current SSP rate is £116.75 per week.

2. Parental Leave From Day One — No Service Qualifying Period

Previously, employees needed 26 weeks of service before accessing Paternity Leave and Unpaid Parental Leave. That qualifying period is now gone entirely. A new employee who joins your business today has an immediate right to parental leave from their first day if they are expecting or have a child.

There is also a new right to Bereaved Partners' Paternity Leave — up to 52 weeks of leave for fathers or partners if the mother or primary adopter of their child dies within one year of the child's birth or adoption.

What you need to do: Remove any reference to qualifying periods from your parental leave policies. Brief your HR contacts or payroll provider on the change.

3. The Fair Work Agency Is Watching

The Fair Work Agency launched on 7 April 2026 as the new enforcement body for employment rights. Unlike the old fragmented system where workers had to bring individual claims, the Fair Work Agency can proactively investigate employers, conduct inspections, issue penalties, and take legal action on workers' behalf. It covers enforcement of minimum wage, holiday pay, SSP, and agency worker rights.

What you need to do: Review your compliance across all of these areas. If you have ever paid staff below the National Living Wage of £12.21/hour (for workers aged 21+), corrected your position now rather than waiting for an investigation.

4. Whistleblowing Protection for Sexual Harassment

From 6 April 2026, reporting workplace sexual harassment is explicitly a protected whistleblowing disclosure. Any action taken against an employee for making such a report is automatically unlawful. This sits alongside the Worker Protection Act 2023, which since October 2024 has required employers to take reasonable steps to prevent sexual harassment proactively.

What you need to do: Ensure your harassment policy is current and that line managers understand that retaliation against anyone who reports harassment — in any form — is unlawful.

5. Employment Tribunal Window Doubles — Coming October 2026

Currently, employees must bring most Employment Tribunal claims within three months of the event. From October 2026, this increases to six months. This means situations you thought were well past the claims window will re-enter it. Employers should preserve records for longer and seek legal advice earlier if there is any dispute with an employee.

Compliance Checklist for SMEs

• Update sick pay policy to remove the three-day waiting period and the lower earnings threshold
• Update parental leave policy to remove service qualifying periods
• Brief managers and payroll on all changes effective from 6 April 2026
• Review National Living Wage compliance — the Fair Work Agency is proactively investigating
• Update or create an anti-harassment policy referencing whistleblowing protections
• Extend your record-keeping period to at least 6 months beyond any employee dispute, in anticipation of the longer tribunal window
• Check whether your HR software or payroll system has been updated to reflect new SSP rules

International Comparison

In Germany, all employees have had statutory sick pay from day one for decades, and a labour inspectorate with significant enforcement powers has long operated. The EU's Transparent and Predictable Working Conditions Directive, implemented across member states by 2022, imposed similar requirements on employers. The UK reforms bring British employment law closer to this European standard despite Brexit.

Key Numbers

• £116.75/week — current SSP rate
• £12.21/hour — National Living Wage for workers aged 21+ in 2026/27
• 6 months — Employment Tribunal claims window from October 2026
• 52 weeks — new Bereaved Partners' Paternity Leave entitlement
• 180 days' pay — maximum protective award for failing collective consultation (doubled)

Sources

• Acas — Employment Rights Act 2025
• Gov.uk — Millions of Workers Get New Access to Sick Pay
• Business.gov.uk — New Employment Rights Guidance
• Longmores Solicitors — Key UK Employment Law Changes 2026

Educational content only — not financial advice.