Small employers manage a steady stream of employment law changes. Some are straightforward administrative updates (a minimum wage rate rise), while others reshape how businesses operate (a cut to the unfair dismissal qualifying period). This checklist covers the material changes that came into effect or will come into effect between 2025 and 2026, with their commencement dates. Where a change is not yet in force, it is marked as expected, with the government’s stated timetable.
April 2025
Neonatal Care Leave (6 April 2025 – in force)
Neonatal care leave is a new statutory entitlement. Employees are entitled to take up to 12 weeks of leave when a child requires specialist medical care in hospital. The leave must be taken within 68 weeks of the child’s birth. It applies to:
- Parents and their partners when a child is in neonatal care
- Adoptive parents and prospective adopters when a child is in care
- Overseas adopters when a child enters Great Britain
Eligibility requires that the employee has responsibility for the child’s upbringing. An employee can take leave in non-consecutive blocks during the first week of neonatal care, but any remaining leave must be taken in consecutive blocks.
Importantly, employees are protected during neonatal care leave; they keep their contractual terms and cannot be dismissed for taking it.
National Minimum Wage (1 April 2025 – in force)
The national minimum wage rates effective from 1 April 2025 are:
- 21 and over: £12.21 per hour
- 18–20: £10.00 per hour
- Under 18: £7.55 per hour
- Apprentices (under 19 or in first year): £7.55 per hour
These rates apply to all workers; the rates change annually.
April 2026
National Minimum Wage (1 April 2026 – in force)
The national minimum wage rates increased from 1 April 2026 to:
- 21 and over: £12.71 per hour
- 18–20: £10.85 per hour
- Under 18: £8.00 per hour
- Apprentices: £8.00 per hour
Small employers on tight margins often need time to plan for a minimum wage increase. At this point (September 2026), the April 2026 rates are already in effect, so payroll should be updated. Any employees earning below these rates must be brought up to the minimum by 1 April 2026 if not already done.
Statutory Sick Pay Changes (6 April 2026 – in force)
The most significant change for small employers is the reform of statutory sick pay (SSP), driven by the Employment Rights Act 2025. The changes are:
Payment from day one. Statutory sick pay is now payable from the first full day of sickness absence. The previous three-day waiting period (often called the “day 3 rule”) has been removed.
Removal of Lower Earnings Limit. Previously, workers earning below the Lower Earnings Limit (£125 per week in 2025-26) were not entitled to SSP. That threshold no longer applies. All eligible employees, regardless of how much they earn, are now entitled to SSP at 80 per cent of their average weekly earnings (or the flat rate, whichever is lower).
Updated rate. From 6 April 2026, SSP is £123.25 per week (or 80 per cent of average weekly earnings, if lower).
Practical impact. Small businesses can no longer refuse SSP to low-earning workers. Equally, they must plan for the cost of SSP from day one; previously, some businesses absorbed the cost of the first three days through absence management policies. Absence policies should be updated to reflect the removal of the three-day wait.
Paternity and Parental Leave Changes (April 2026 – expected, with Statutory Instruments laid January 2026)
The Employment Rights Act 2025 reforms parental leave significantly, with changes expected to take effect in April 2026.
Paternity leave: day one right. Previously, an employee needed 26 weeks of service before becoming eligible for statutory paternity leave. From April 2026, fathers and partners can take paternity leave from their first day of employment. This affects approximately 32,000 additional fathers per year who will now be eligible. The notice period for paternity leave where the baby is due between 5 April and 25 July 2026 is reduced to 28 days (instead of the usual 15 weeks), to ease transition.
Unpaid parental leave: day one right. Previously, employees needed one year of service before becoming eligible for unpaid parental leave. From April 2026, this changes to a day one right, affecting approximately 1.5 million parents. Unpaid parental leave is still unpaid; the change is only to the timing of eligibility.
Bereaved Partner’s Paternity Leave (new entitlement). A new right comes into force: fathers and partners who lose their partner before their child’s first birthday can take up to 52 weeks of paid or unpaid leave. This addresses a gap where bereaved partners previously relied on employer discretion.
Action for employers. Review paternity and parental leave policies to reflect day one eligibility. Update employee handbooks and inform line managers of the changes. If an employee becomes eligible for paternity leave with less than 15 weeks’ notice (because they joined after their partner became pregnant), note the reduced notice period and agree leave dates promptly.
January 2027
Unfair Dismissal: Qualifying Period and Compensation Cap (1 January 2027 – expected)
The Employment Rights Act 2025 reduces the qualifying period for the right to claim unfair dismissal from two years to six months. This applies to dismissals from 1 January 2027 onwards.
Impact. A new employee dismissed after six months can now bring an unfair dismissal claim to an employment tribunal. Previously, they would need two years of service. This significantly increases the risk in early-stage employment. A probation period is no longer a shield against tribunal claims after six months.
What employers need to do. Small employers should review their probation policies and ensure they are robust. Probation should not be a lazy waiting period; it must be a genuine trial of capability. Employers should:
- Set clear probation objectives at day one (usually three to six months)
- Hold regular check-ins with the employee
- Document any concerns about performance or fit
- Take action (training, support, or dismissal) before probation ends if there are issues
- Ensure any dismissal before six months’ service meets a fair reason and fair procedure (even though a tribunal claim is not possible after six months, terminating without fair process is bad practice)
- From six months onwards, dismiss only for a fair reason (capability, conduct, redundancy, statutory prohibition, or some other substantial reason) and follow fair procedure
No change to compensation cap. The Employment Rights Act 2025 removes the cap on compensatory awards in unfair dismissal claims. This means awards can now go above the previous £88,519 ceiling (as of 2026-27). Employers should ensure probation and performance management are robust to avoid costly claims.
What small employers should do now
Review policies. Update sickness absence policies to remove references to the three-day wait for SSP; parental leave policies to reflect day one eligibility; and dismissal procedures to emphasize the importance of fair process from six months onwards.
Consult payroll. If using external payroll, brief them on the changes. If running payroll in-house, update systems to calculate SSP from day one and remove the earnings threshold check.
Inform staff. Communicate changes to existing employees via email, handbook updates, or team meetings, especially changes to sick pay and paternity leave that might affect them.
Plan financially. The removal of the three-day wait and the earnings threshold for SSP will increase the cost of absence, especially in low-wage sectors. Budget accordingly.
Strengthen procedures. Earlier unfair dismissal claims (from six months) mean robust probation and performance management become more important. Invest in manager training on fair dismissal procedures.
Key points
- Neonatal care leave is available from 6 April 2025: up to 12 weeks for parents of children requiring hospital-based specialist care
- National minimum wage rose to £12.71 (21+), £10.85 (18–20), and £8.00 (under 18 and apprentices) from 1 April 2026
- Statutory sick pay is payable from day one (not day 4) from 6 April 2026, at the rate of £123.25 per week or 80 per cent of earnings (whichever is lower); the earnings threshold is removed
- Paternity and unpaid parental leave become day one rights from April 2026; a new Bereaved Partner’s Paternity Leave entitlement (up to 52 weeks) is also introduced
- Unfair dismissal qualifying period cuts from two years to six months from 1 January 2027; the cap on compensation is removed
- Small employers should update policies, brief payroll and staff, and strengthen dismissal procedures before these dates
Related: Find HR support near you