UK Employment Law Changes 2026: What Employers Need to Know
April 2026 brings significant updates to UK employment law, particularly under the Employment Rights Act 2025.
These changes are not just technical, they will directly affect payroll, HR processes, and compliance, especially for employers in regulated sectors such as health and social care.
Below is a breakdown of the most important changes and what they mean in practice.
1. Statutory Sick Pay (SSP) Reform
The most immediate and impactful change is to Statutory Sick Pay:
SSP is now payable from Day 1 of sickness (previously Day 4)
The Lower Earnings Limit has been removed
SSP is calculated as:
£123.25 per week (2026/27) OR
80% of average weekly earnings (whichever is lower)
What this means:
More employees now qualify
Employers face higher short-term absence costs
Absence management must become more structured
For sponsors, this also intersects with immigration compliance under the Immigration Rules.
2. Increased Focus on Worker Protection
The government has signalled a stronger direction toward:
Job security
Fair pay
Early protection rights
While not all reforms are fully in force yet, employers should prepare for:
Stronger rights from day one of employment
Greater scrutiny on dismissal practices
Expanded protections for vulnerable workers
3. Payroll & Compliance Adjustments
With SSP changes alone, employers must:
Update payroll systems to reflect day-one payments
Adjust calculations for 80% earnings cap
Ensure accurate record-keeping for absences
This is not optional — poor payroll compliance can quickly escalate into:
HMRC issues
Employment disputes
Sponsor licence risks
4. Impact on Sponsored Workers
For employers sponsoring migrant workers, these changes carry additional implications.
Under the UK Visas and Immigration requirements:
Workers must meet minimum salary thresholds
Employment must remain genuine and ongoing
Key Risk:
If a worker is on SSP:
Their income may drop below the threshold
This must be assessed carefully
While sickness is generally permitted, sponsors must:
Keep clear records
Ensure absences are temporary
Monitor compliance risks
5. Increased Enforcement Environment
There is a clear trend toward:
More compliance visits
More data-driven enforcement
Greater scrutiny of:
Care providers
Small businesses
Sponsors with rapid growth
The UK Home Office is increasingly focused on whether businesses:
“Know their workforce, can evidence compliance, and act promptly when issues arise.”
6. What Employers Should Do Now
1. Review Policies
Update:
Sickness policies
Absence reporting procedures
Payroll frameworks
2. Train Staff
Ensure HR, managers, and payroll teams understand:
SSP changes
Reporting obligations
Compliance risks
3. Strengthen Record-Keeping
Maintain:
Attendance logs
Sick leave records
Payroll evidence
4. Align HR with Immigration Compliance
This is where many businesses fail.
HR decisions (like reduced hours or absence) can have immigration consequences.
7. Common Mistakes to Avoid
Treating SSP as a simple payroll issue
Ignoring salary threshold implications for sponsored workers
Failing to document absences properly
Not updating internal systems in time
Overlooking reporting duties
Final Thought
The 2026 employment law changes reflect a broader shift:
From informal workforce management → to structured, accountable compliance
For employers, especially sponsors, success will depend on one thing:
Systems. Documentation. Consistency.
Need Support?
At Tulia, we support employers with:
Employment and immigration compliance alignment
Sponsor licence audits
Policy drafting and HR training
Risk management for care providers
If you need support please book a business immigration consultation here https://calendly.com/info-56205/business-immigration-consultation
