April 2026 Payroll & Employment Law Changes: What Every Employer Needs to Know

The Employment Rights Act 2025 (ERA 2025) has brought the most significant wave of employment law reforms in a generation, with the first major phase coming into force on 1 and 6 April 2026. These changes affect pay, statutory sick pay, family leave, redundancy, whistleblowing, record-keeping, and enforcement. Here is everything you need to know to stay compliant.

1. National Minimum Wage & National Living Wage Increases (1 April 2026)

From 1 April 2026, all National Minimum Wage and National Living Wage rates increased. Employers must ensure their payroll systems reflect these new rates immediately:

• Workers aged 21 and over (National Living Wage): £12.71 per hour (up from £12.21)

• Workers aged 18–20: £10.85 per hour (up from £10.00)

• Workers aged 16–17 and apprentices: £8.00 per hour (up from £7.55)

Action required: Audit pay practices that could inadvertently reduce pay below NMW — including deductions, training time, uniform policies, and salary sacrifice arrangements.

2. Statutory Sick Pay (SSP) Reforms (6 April 2026)

The SSP rules have been significantly overhauled from 6 April 2026:

• No more waiting days — SSP is now payable from day one of sickness (previously from day four).

• Lower earnings limit removed — employees earning below the previous £123/week threshold are now eligible.

• New SSP rate: £123.25 per week, or 80% of average weekly earnings if lower.

• Transitional protection: Employees already receiving SSP before 6 April 2026 continue at the flat rate until their entitlement ends.

  
  

Action required: Update payroll systems, sick pay policies, and employment contracts before deploying. Consider the financial impact, particularly in sectors with high levels of short-term absence.

3. Day-One Family Leave Rights (6 April 2026)

The ERA 2025 removes all qualifying service requirements for paternity leave and unpaid parental leave. From 6 April 2026:

• Paternity leave is now a day-one right — the previous 26-week qualifying service requirement has been removed.

• Unpaid parental leave is now a day-one right — the previous one-year service requirement has been removed.

• Paternity leave can now be taken after Shared Parental Leave — the previous restriction has been removed.

• Bereaved Partner's Paternity Leave — a new right allowing up to 52 weeks of unpaid leave where a child's mother or primary adopter dies within a year of birth or adoption.

Note: Statutory paternity pay retains its own eligibility rules. These changes apply to babies born on or after 6 April 2026, or adoptions placed on or after that date.

4. Statutory Family Pay Rate Increase (6 April 2026)

Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement, Neonatal Care Pay, and Maternity Allowance all increased from £187.18 to £194.32 per week from 6 April 2026.

5. Collective Redundancy: Doubled Protective Award (6 April 2026)

The maximum protective award for failing to properly consult on collective redundancies has doubled. Employment Tribunals can now award up to 180 days' pay per affected employee (previously 90 days). The statutory redundancy weekly wage cap has also increased from £719 to £751.

Action required: Ensure managers are trained on collective consultation requirements. Keep careful records of any redundancy dismissals to avoid inadvertently triggering thresholds.

6. Whistleblowing: Sexual Harassment Now a Protected Disclosure (6 April 2026)

From 6 April 2026, disclosures of sexual harassment qualify as protected whistleblowing. Employees who report sexual harassment — whether of themselves or others — are now protected from dismissal and detriment. Update whistleblowing and harassment policies accordingly and train managers on these new requirements.

7. Mandatory Holiday Pay & Annual Leave Record-Keeping (6 April 2026)

All employers are now required to keep "adequate" records of annual leave and holiday pay. Records must include dates of leave taken, amounts paid, and payments in lieu of holiday. These records must be retained for six years. The Fair Work Agency has enforcement powers in this area, including the ability to pursue criminal sanctions for non-compliance.

8. The Fair Work Agency (FWA) Launched (7 April 2026)

The Fair Work Agency was established on 7 April 2026, consolidating enforcement powers from multiple bodies including those for National Minimum Wage, Statutory Sick Pay, and holiday pay. The FWA has powers to issue civil penalties for breaches, initiate tribunal proceedings, and recover enforcement costs. Employers should expect increased enforcement activity and ensure their records and practices are in order.

Key Payroll Deadlines — Spring/Summer 2026

• 19 April 2026: Final PAYE return due for the 2025/26 tax year.

• 31 May 2026: P60s must be issued to all employees for the 2025/26 tax year.

• 6 July 2026: P11D deadline for reporting benefits in kind and expenses for 2025/26.

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How Crown Payroll Can Help

Navigating these changes can be complex. Our team at Crown Payroll Services is here to help you review and update your payroll processes, contracts, and policies to ensure full compliance. Whether you need support updating your systems for the new SSP rules, understanding the impact of day-one family leave rights, or preparing for FWA scrutiny, we're here to help.

Get in touch with us today on 01942 644864 or email hello@crownpayrollservices.co.uk to discuss your needs.