Bosses expected to ‘Make Work Pay’ as employment reforms roll out

The world was in the grip of the Great Depression when Franklin D. Roosevelt became US President in 1933. His ‘New Deal’ reshaped the American labour market and restored public confidence.

Nearly a century later, the UK has entered its own new chapter with the Employment Rights Act, which has now come into force, with many measures still subject to phased implementation. With strengthened sick pay, enhanced parental leave, and a wide package of reforms expected to be introduced over the next two years, the Act represents one of the most significant shifts in UK employment law in decades.

The government argues that the Act will drive growth, improve job security, and raise living standards. For employers, the focus has now shifted to operating within this new framework and preparing for the anticipated introduction of measures throughout 2026 and 2027.

What’s changing and when

Employer responsibilities have steadily increased in recent years, and the Employment Rights Act continues this trajectory. While the Act itself is in force, many of its reforms are being introduced in stages to give employers time to adapt.

Key measures include a mix of changes already active and others expected to be implemented later.

Individual rights and protections

• Day‑one entitlement to paternity leave and unpaid parental leave, with notice provisions already in effect and full implementation currently expected by April 2026.
• Bereavement leave for pregnancy loss is part of the wider package of reforms proposed for introduction in 2027.
• The qualifying period for unfair dismissal is expected to reduce to six months from January 2027, subject to final confirmation.

Employment practices

• Fire‑and‑rehire protections are planned, with changes expected to take effect from January 2027.
• Reforms to zero‑hours contracts, including guaranteed hours and reasonable notice, are anticipated for 2027, though details remain subject to further guidance.

Pay and working conditions

• Statutory Sick Pay reforms, including the removal of the Lower Earnings Limit and waiting days, are scheduled to take effect from 6 April 2026.
• Flexible working reforms form part of the expected 2027 rollout.

Workplace culture and safety

• Strengthened whistleblowing protections relating to sexual harassment are due to take effect from April 2026.
• New employer duties to prevent sexual harassment, including protections against third‑party harassment, are expected to come into force in October 2026.
• Proposals around the use of NDAs in harassment and discrimination cases sit within the wider reform agenda, with further detail expected as consultations progress.

How are employers being impacted?

With the phased rollout underway, employers are beginning to adjust to the new requirements. While the full impact will continue to develop, earlier insights still help illustrate how organisations expected the reforms to affect them.

Data from our 2026 UK Salary & Recruiting Trends guide – collected while the legislation was still progressing as a Bill – showed a divided landscape. Almost half of organisations anticipated challenges arising from the reforms, most commonly expecting increased operational costs, a greater administrative burden to ensure compliance, and heightened legal risk. At the same time, 47% did not foresee significant disruption, and fewer than half had begun preparing at that stage.

Now that the phased implementation is underway, many of these anticipated pressures are becoming practical realities. Rising business costs, increased compliance obligations, and upcoming changes to dismissal rules place greater emphasis on effective hiring, workforce planning, and policy alignment.

How should employers respond now?

With the legislation active and reforms being introduced in stages, the priority is effective planning and timely implementation. Employers need to ensure compliance while maintaining agility and competitiveness.

1. Strengthen workforce planning

Accurate forecasting of skills needs, identifying gaps and aligning talent strategies with business goals will help organisations remain compliant and cost‑effective. Workforce solutions partners can support this through analytics, assessment tools, and salary benchmarking.

2. Reassess flexible working models

Flexible working remains a key expectation among employees, and with legislative changes expected for 2027, employers should review their approach now. While requests can still be refused on legitimate grounds, doing so may affect wellbeing and retention. Hybrid working remains a powerful tool: our Working Well Report found that 84% of employees say hybrid options improve wellbeing, and 39% have left a role due to poor wellbeing support.

3. Embrace agile talent strategies

Contingent talent and flexible workforce models can help organisations access critical skills without long‑term cost commitments. A Managed Service Programme (MSP) can support compliance, visibility, and cost control.

Make them a deal they can’t refuse

Whether the Employment Rights Act will leave a legacy comparable to Roosevelt’s New Deal remains to be seen. What is clear is that organisations that put their people first – and adopt agile, forward‑thinking workforce strategies – will be best positioned to attract and retain the talent they need for long‑term success.

If you’re looking to solve your talent and recruitment challenges in an evolving world of work, get in touch with us today.