The Employment Rights Act 2025 represents the first major legislative phase of the UK's Plan to Make Work Pay.

The government is introducing the reforms progressively rather than implementing all measures at once. According to the latest government timeline, changes have been introduced throughout 2026, with further measures scheduled for October 2026, January 2027 and later in 2027. The government has also noted that future implementation dates remain subject to parliamentary processes and may change.

For international employers, this phased approach means UK employment compliance should be treated as an ongoing process rather than a one-time review.

Several important employment-rights changes have already taken effect during 2026.

Statutory Sick Pay

From April 2026, Statutory Sick Pay (SSP) became payable from the first day of sickness absence, representing an important change to the previous system.

Employers should ensure that payroll systems and absence-management processes reflect the new rules.

Paternity and Parental Leave

The reforms also introduced day-one eligibility for paternity leave and unpaid parental leave for eligible employees.

This means employers should review their leave policies and ensure HR teams understand the updated eligibility and notification requirements.

Fair Work Agency

The government established the Fair Work Agency in April 2026 as part of the wider employment-rights reforms.

International companies employing UK workers should therefore pay particular attention to employment records, statutory entitlements and compliance procedures.

Trade Union Reform

Further trade-union reforms have also been introduced during 2026, including changes to statutory balloting and other industrial-relations procedures. Electronic and workplace balloting for statutory trade-union ballots took effect in August 2026.

October 2026 is another significant point in the implementation timetable.

Employment Tribunal Time Limits

From 1 October 2026, the time limit for bringing relevant claims to an Employment Tribunal increases from three months to six months.

The change applies to relevant matters occurring on or after 1 October 2026, subject to transitional provisions.

Why does this matter to employers?

Companies should consider whether their HR documentation and internal dispute-resolution procedures are sufficiently robust.

Employers should maintain clear records relating to:
• Employment contracts
• Disciplinary procedures
• Grievances
• Performance management
• Employee communications
• Leave and absence
• Termination decisions
• Workplace complaints
Good record-keeping can help employers manage employment issues consistently and respond appropriately when disputes arise.

From 30 October 2026, employers will have stronger obligations relating to the prevention of sexual harassment.

Employers will be required to take all reasonable steps to prevent sexual harassment of employees. New provisions will also address harassment by third parties.

For international companies, this means workplace policies should go beyond simply having a written anti-harassment policy.

Employers should consider:
• Employee training
• Manager training
• Reporting mechanisms
• Complaint-handling procedures
• Workplace risk assessments
• Investigation procedures
• Documentation and record-keeping
• Protection against retaliation
Companies should also make sure employees understand how and where they can report concerns.

Although this article focuses on 2026, international employers should already be preparing for several important changes scheduled for January 2027.

Unfair Dismissal

The qualifying period for ordinary unfair-dismissal claims is scheduled to reduce from two years to six months for dismissals from 1 January 2027.

The reforms will also remove the existing statutory cap on compensatory awards for successful unfair-dismissal claims.

This is particularly important for employers recruiting new UK employees during 2026.

Companies should review:
• Probation procedures
• Performance management
• Documentation of performance concerns
• Disciplinary procedures
• Termination processes
• Manager training
• HR record-keeping
The UK government has specifically encouraged employers to begin preparing for these changes ahead of their implementation.

Fire-and-Rehire Protections

Additional protections concerning dismissal and re-engagement, commonly referred to as "fire and rehire," are scheduled to take effect in January 2027.

Employers should therefore review how they approach significant changes to employment terms and seek appropriate local employment-law advice when considering such changes.

Employment-law reforms can have a direct or indirect effect on payroll administration.

International employers should review whether their payroll provider or EOR has updated its systems for:
• Statutory Sick Pay
• Leave entitlements
• Employee deductions
• Statutory payments
• Employment status
• Payroll records
• Termination payments
• Required employee documentation
Payroll should not be treated separately from HR compliance.

A change in employment rights can require corresponding updates to HR processes and payroll configuration.

An Employer of Record allows an international company to employ workers in the UK through a local employment structure without establishing its own UK employing entity.

However, using an EOR does not mean that the client should ignore local employment-law developments.

International companies should regularly confirm that their EOR partner is:
• Monitoring UK employment-law changes
• Updating employment contracts where necessary
• Maintaining compliant payroll processes
• Applying statutory leave and sick-pay requirements correctly
• Supporting compliant employee onboarding
• Maintaining appropriate employment records
• Updating HR policies when required
• Communicating important changes to the client

Questions global employers should ask their EOR provider

Before hiring or renewing UK employees, companies can ask their EOR provider:

1. Have UK employment contracts been reviewed against the 2026 reforms?

2. How are the new Statutory Sick Pay rules reflected in payroll?

3. How are paternity and parental leave requests administered?

4. Has the provider updated its sexual-harassment prevention framework?

5. How are disciplinary and termination procedures handled?

6. How is the provider preparing for the January 2027 unfair-dismissal changes?

7. Are any additional compliance or HR costs expected as a result of the reforms?

These questions can help companies understand not only the EOR's monthly service fee but also the scope of its ongoing compliance support.

International companies hiring employees in the UK can use the following checklist as a starting point:

For companies already employing people in the UK, 2026 is an appropriate time to conduct a structured HR and payroll review.

Step 1: Review employment documentation

Check whether contracts, employee handbooks and HR policies reflect current UK requirements.

Step 2: Review payroll

Confirm that statutory payments, leave-related payments and other payroll calculations are correctly configured.

Step 3: Review workplace policies

Pay particular attention to harassment prevention, grievance procedures and employee reporting mechanisms.

Step 4: Prepare managers

Managers should understand how changes to employee rights affect recruitment, absence, performance management and termination.

Step 5: Prepare for 2027

Do not wait until January 2027 to review unfair-dismissal procedures and other upcoming requirements.

Step 6: Review your EOR or payroll provider

If employees are managed through an EOR or payroll provider, ask the provider how it is implementing the latest UK employment-law changes.

The UK employment-law reforms will continue into 2027.

The government's current timetable includes further measures covering areas such as:
• Unfair dismissal
• Fire-and-rehire protections
• Trade-union rights
• Flexible working
• Bereavement leave
• Protection for pregnant employees and new mothers
• Regulation of umbrella companies
• Guaranteed-hours rights for qualifying workers
• Collective redundancy consultation
• Gender-equality action plans
• Menopause-related workplace support

The exact timing of some future measures remains subject to further consultation, regulations and parliamentary processes.

For this reason, employers should monitor official updates rather than relying on a single annual compliance review.

Conclusion

The UK's employment environment is undergoing substantial regulatory change in 2026 and into 2027.

For international employers, compliance involves more than calculating salaries correctly. Companies need to consider employment contracts, statutory leave, payroll, employee relations, workplace policies, termination procedures and ongoing HR administration.

For businesses hiring a small number of employees in the UK, expanding into the market for the first time, or managing international employees without a dedicated local HR infrastructure, an EOR or local payroll partner can help simplify employment administration.

However, employers should always confirm exactly which services are covered by their provider and how regulatory changes are incorporated into the employment and payroll process.

YeeGoo Technology Limited supports international companies with Employer of Record (EOR), global payroll, immigration, work-permit processing and cross-border employment solutions, helping businesses manage employees across multiple jurisdictions.

This article is provided for general informational purposes and should not be treated as legal advice. UK employment requirements can vary according to the circumstances of an employer and employee. Employers should obtain professional legal or HR advice where necessary.