Employment Rights Act 2025: are you compliant?

What’s changed?

Statutory Sick Pay (SSP)

• SSP is now payable from the first day of absence; there is no longer a three-day waiting period.
• The lower earnings limit has been removed, meaning employees earning below the current threshold of £123 a week are now eligible for SSP.
• Additionally, those earning below the lower earnings limit are entitled to 80% of their average weekly earnings.
• The SSP weekly rate has increased to £123.25.
• These changes are likely to increase SSP costs for employers, particularly where they have casual, variable hours or low paid workers or where there are high levels of short-term sickness absence.

Day-one rights for family leave

• Paternity Leave and Unpaid Parental Leave are now available from the first day of employment.
• Employees are no longer prevented from taking paternity leave after taking shared parental leave.
• This change means new starters are now more likely to take family-related leave very early in their employment, including during their probation period.

Bereaved partners

• This is a new right that allows bereaved partners to take up to 52 weeks of unpaid paternity leave if the child’s mother or primary adopter dies.

Sexual harassment 

• Disclosures of sexual harassment now count as qualifying disclosures under whistleblowing law.
• Individuals who make these disclosures are protected from detriment and unfair dismissal as whistleblowers. 
• This is in addition to the legal duty on employers to take reasonable steps to prevent (specifically) sexual harassment in the workplace, which was introduced in 2024.

Collective redundancy

• The maximum protective award for failing to comply with statutory collective consultation requirements has increased from 90 days’ pay to 180 days’ pay per affected employee.
• This change could make the consequences of breaching these requirements significantly more expensive for employers – and perhaps prohibitively so. It also reinforces the importance of early planning and documentation.

Holiday pay and working time records

• Employers must now keep adequate records of each worker’s annual leave entitlement and the annual leave actually taken.
• A failure to comply with these obligations will amount to a criminal offence, punishable by a fine. It is expected that the enforcement of holiday obligations will fall within the remit of the new Fair Work Agency (see point below). 

Other employment law changes (unrelated to the ERA) that came into force in April 2026:

• Compensatory award: The maximum compensatory award for unfair dismissal has now increased from £118,223 to £123,543 (this cap is expected to be removed for dismissals occurring on or after January 2027, under the current timeframe.)
• Fair Work Agency: A new enforcement body (the Fair Work Agency) has now been established, with the power to (among other powers) investigate suspected breaches of employment law, issue penalties, and take legal action on behalf of employees. As a result, employers are likely to face an increased risk of investigation and enforcement action.