What you need to know about the new Employment Rights Act

As of the 6^th April, the Employment Rights Act 2025 has been implemented, marking the most significant transformation of workplace rights in decades.

From now, employees will receive Statutory Sick Pay from their first day of sickness absence – rather than having to wait until the fourth day, regardless of how much they’re getting paid. This will benefit millions of people across the United Kingdom, who will get around £400 million a year extra in sick pay. By ensuring people can rest and recover without fear of losing income, the reforms are expected to help reduce duration of sickness absences, boost productivity, and limit the spread of illnesses throughout workplaces.

Employment Rights Minister, Kate Dearden explained: “No one should have to drag themselves into work when they’re unwell because they can’t afford not to – and no new parent should miss out on time with their child because they haven’t been in their job long enough.

“These reforms put that right. This is what it means to make work pay for everyone.”

New fathers and partners have gained the right to paternity leave from the first day of a job, rather than having to wait six months to be eligible. New day one rights to unpaid parental leave have also begun, which will benefit 1.5 million working parents across the UK who will no longer have to wait a year before qualifying.

Business Secretary, Peter Kyle, said: “Day one rights mean exactly that: rights that are there for you from the moment you start a job, and from the moment you get sick.

“Whether you’re a low-paid employee who’s been forced to work while unwell, or a new parent who wants to be there for their family, these changes are for you. We’re delivering the most significant upgrade to workers’ rights in a generation.

“Parents will also be granted a new right to time off following the death of a child’s mother or primary adopter, through new Bereaved Partner’s Paternity Leave – hard fought for by campaigners including Aaron Horsey and the charity Gingerbread.”

Key changes to legislation include:

• Day-one rights: paternity leave and unpaid parental leave will become ‘day-one’ rights, removing the previous one-year service requirement. Statutory Sick Pay (SSP) will also be available from the first day of illness, removing the “waiting period” and the lower earnings limit
• Unfair dismissal reform: the qualifying period for unfair dismissal protection is set to be slashed from two years to just six months, alongside the removal of the compensation cap for claims
• Zero-hours protections: a ban on exploitative zero-hours contracts, giving workers the right to a contract that reflects their actual hours worked and compensation for cancelled shifts
• Whistleblowing protections: there are stronger protections in place for workers who report sexual harassment in the workplace
• Action plans: employers with 250 or more employees are encouraged to publish the steps they are taking to reduce the gender pay gap in their workplace, and support employees experiencing menopause

Further changes, such as to unfair dismissal protections and changes to trade union legislation, will continue to be introduced across 2026 and 2027.

Employees and the new Employment Rights Act

However, with the new Act now implemented, research by Reward Gateway | Edenred has found that most employees remain unaware of how the changes apply to them personally. Nearly 42% of employees admit they do not understand the upcoming changes to parental leave well enough to know how they are personally affected. This figure includes 21% who say they do not understand the changes at all. The confusion extends across the entire spectrum of the new Act. 41% of workers are unclear on their new redundancy rights and protections regarding pay transparency and discrimination, and 40% do not understand the new unfair dismissal protections. 39% remain in the dark about strengthened flexible working rights, while fundamental shifts in holiday pay and entitlement leave 37% of the workforce confused about their personal standing.

Chris Britton, Director of People Experience at Reward Gateway | Edenred, commented: “We are looking at a fundamental shift in the relationship between employer and employee. A right that an employee does not know about is a right they cannot exercise, and employers share a responsibility to ensure their staff are both empowered and informed. Many of these changes will significantly impact the lives of employees, yet the lack of awareness could also pose issues for businesses.  These figures should serve as a wake-up call that we need a massive, nationwide effort to explain these topline changes in a way that resonates with employees across the UK.”

Employers and the new Employment Rights Act

Experts are warning that employers could be at risk of breaching the Employment Rights Act, as new research by Breathe HR has revealed that over a third of HR leads across the UK are unaware that a new enforcement agency is about to be granted sweeping powers. The Fair Work Agency will be responsible for the enforcement of many employment rights from the 7^th April.

Breathe HR found that over a third (36%) of those handling HR in UK SMEs have never heard of the new Fair Work Agency, and a further 50% said that while they have heard about the new body, they only know very little about it. This points to a lack of awareness around the latest employment rights developments, and experts are warning employers that they are at risk of being fined if their HR policies and documentation are out of date or incorrect.

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Wendy Read, HR Director at Omny Group, who advise businesses on their HR and employment practices, said: “The fact that over a third of SME employers haven’t even heard of the Fair Work Agency should be a wake-up call. We’re introducing a new regulatory body, yet the very businesses it will impact most are still in the dark. That’s not just a communication gap, it’s a systemic issue in how we support SMEs.

“In my experience, most founders and leaders want to do the right thing. They care about their people and understand the importance of fair work. But they’re time-poor, navigating constant change, and too often expected to interpret complex legislation without clear, practical guidance.”

An announcement last month found that nearly 400 businesses had been issued penalties for failing to comply with minimum wage laws, totalling £12.6 million. National minimum wage rates changed on the 1st of April, and the Fair Work Agency will, from the 7th of April, be responsible for ensuring that employees are paid correctly.

Bharat Siyani, VP of People and Culture at Breathe HR, recommends companies take the following steps to stay compliant:

• Appoint a member of staff to monitor updates to employment law and flag changes that need to be made within the organisation to comply with them
• Ensure all contracts and probation policies are updated to reflect the current legislation
• Check you have written policies for holiday, sickness, statutory sick pay, and working hours that reflect new employment rights
• Confirm that everyone is being paid at or above the correct national minimum or living wage, once you have factored in deductions
• Audit all your past holiday, overtime, working hours, and pay records to ensure they are accurate
• Make sure letters and documentation related to employee queries, grievances, and dismissals are organised properly

It is of vital importance that SMEs and startups keep up to date with new employment legislation in order to avoid fines, and continue to build strong employee and employer relationships.

Read concluded: “If the Fair Work Agency is going to succeed, it can’t just enforce, it has to enable. That means cutting through the noise, speaking the language of SMEs, and providing support that is genuinely accessible. Otherwise, we risk creating fear and confusion instead of progress.”