Employment Rights Act 2025: Is your business ready?
With the first wave of Employment Rights Act changes taking effect in April 2026, business owners face a critical question - are you prepared, or are you hoping this will somehow pass you by? The truth is, burying your head in the sand exposes your business to unnecessary risk. But here's the good news - getting ready doesn't have to be overwhelming.
Cut through the noise
The biggest challenge facing businesses isn't the legislation itself, it's the avalanche of conflicting advice from self-proclaimed experts. One business owner recently told us they'd been quoted nearly £2,000 for new ERA-compliant employment contracts. When our HR consultant reviewed their existing contracts, minimal tweaks were all that was needed. That's the power of cutting through noise and focusing on what actually matters for your business. Start with official sources - Government publications, ACAS guidance, and experienced HR consultants with a proven track record. Ignore the rest.
What's changing in April 2026?
The Employment Rights Act has now gained Royal Assent, meaning these changes are happening. The first phase includes reforms to Statutory Sick Pay, day-one entitlement to paternity and parental leave, establishment of the Fair Work Agency, and changes to trade union processes. Rather than trying to understand everything at once, focus on what impacts your business now.
Assess where you stand
The most effective way to prepare is to audit your current position. Where are your policy gaps? What needs updating in your employee handbook? Which contracts require amendment? Most importantly, do your managers understand what's changing and how it affects their teams?
Take the statutory sick pay changes as an example. From April, all workers will be entitled to SSP from day one of absence at either 80% of usual earnings or the statutory rate, whichever is lower. To understand the financial impact on your business, you need robust absence tracking. Without data on past absence patterns, you're flying blind.
The real risks of being unprepared
Poor HR practices, outdated handbooks, and uninformed managers could render your business non-compliant from April onwards. But beyond legal compliance, there's a business case for getting this right. The ERA presents an opportunity to refresh your policies, streamline your processes, and work smarter. View it as a chance to strengthen your people management, not just a compliance burden.
Practical steps to take now
We have developed a free online ERA readiness tool to assess where you stand today. It will identify risky people practices, policy and contract gaps, manager readiness levels and missed opportunities to improve performance. It's fast, insightful, completely free…and it could save your organisation costly mistakes.
In just a few minutes, you'll receive your readiness score showing exactly how prepared your organisation is. More importantly, you will receive a personalised action report with tailored recommendations based on your current HR practices, and practical expert guidance with specific steps to strengthen compliance, reduce cost and risk, and build manager confidence ahead of regulatory change.
Make sure you review your current employment policies against the April changes. Often, simple wording updates will bring you into line. For instance, if your sick pay policy starts from day-three, changing it to day-one is straightforward. Then, link to statutory guidance rather than replicating entire policies in your handbook. Only create custom policies where you offer enhanced benefits beyond statutory requirements.
Finally, equip your managers to communicate these changes clearly to your team. Build ERA updates into your onboarding process for new hires, and ensure current employees understand their new rights through whatever channels work for your business.
The bottom line
The Employment Rights Act isn't going away, and further changes are coming in October 2026 and throughout 2027. Instead of feeling fearful or overwhelmed, take small, practical steps now. Audit your current position, identify the gaps, and tackle them systematically. Your business, and your employees, will be better for it.
If you’d like to book a business readiness call with an HR expert to understand the actions you need to take, call 0161 941 2426 or email us at p3advice@p3pm.co.uk.
