What Every Small Business Owner Must Know About the April 2026 Employment Law Changes

The 6th of April has arrived — and with it, some of the most significant changes to UK employment law in years. If you run a small business and haven't reviewed your contracts, policies, or HR processes recently, now is the time.

The Employment Rights Act 2025 has begun rolling out in phases, and several key changes are already in effect. Here's what you need to know — and what you should be doing about it right now.

Paternity and Parental Leave Are Now Day One Rights

From 6 April 2026, employees no longer need to meet a qualifying period before they can take paternity leave or ordinary parental leave. These rights apply from their very first day with you.

This is a meaningful shift. If you have hired anyone recently — or plan to hire in the coming months — you need to make sure your contracts and onboarding materials reflect this change. Telling a new employee they aren't entitled to parental leave could expose your business to a claim.

What to do: Update your employment contracts, your parental leave policy, and any onboarding documents that reference qualifying periods for these types of leave.

You Must Now Keep Records of Annual Leave and Holiday Pay

From 6 April 2026, keeping records of annual leave and holiday pay is a legal requirement. This closes a long-standing grey area that many small businesses operated in — tracking leave informally or relying on employee memory.

If you're still managing holiday on a spreadsheet or handwritten calendar, this is your prompt to put a proper system in place. Not only will it protect you legally, it will also save you significant time and dispute-resolution headaches.

What to do: Implement a simple, documented leave management system. Even a well-maintained spreadsheet is better than nothing — but HR software designed for small businesses can automate this with minimal cost or effort.

The Collective Redundancy Protective Award Has Doubled

If you ever find yourself in the position of making 20 or more redundancies within 90 days, the maximum protective award for failure to consult has doubled — from 90 days' pay to 180 days' pay per affected employee.

This is not a change most small businesses will face imminently, but it is a stark reminder that cutting corners on redundancy consultation is now far more expensive. The cost of getting it wrong has never been higher.

What to do: If you are considering any restructuring or redundancies, seek HR advice before you begin the process — not after.

Sexual Harassment Disclosures Are Now Protected as Whistleblowing

From 6 April 2026, if an employee reports sexual harassment in the workplace, that disclosure is now legally treated as whistleblowing. This means they are protected from dismissal, demotion, or any form of unfair treatment as a result of speaking up.

Combined with the existing duty on employers to take all reasonable steps to prevent sexual harassment, this puts a clear obligation on businesses of all sizes to have robust policies, training, and reporting channels in place.

What to do: Review your anti-harassment policy, make sure your team knows how to report concerns, and consider whether your managers have had any training on handling sensitive disclosures correctly.

More Is Coming — Don't Wait to Prepare

April's changes are just the first wave. Further reforms are expected in October 2026 and January 2027, including a significant overhaul of unfair dismissal rules (more on that in our next post).

The businesses that will navigate this period most confidently are those that use 2026 as a window to get their HR foundations in order — not those that scramble to catch up when the next deadline lands.

If you are unsure whether your contracts, policies, or practices are up to date, a HR compliance audit is a practical and relatively quick starting point.

People & Compliance works with small businesses across the UK to make sense of employment law changes and put the right processes in place — without the cost or complexity of a full in-house HR team. Book a free 30-minute consultation to find out where you stand.