Employment Rights Act 2025

Key changes for SMEs with date of change.

From 6 April 2026           

1. Statutory Sick Pay 
   
   Removal of the Lower Earnings Limit
   All eligible employees will be entitled to SSP regardless of income. SSP will be paid at 80% of normal weekly earnings or the uprated weekly flat rate of £123.25, whichever is lower.
   
   Removal of the Waiting Period
   SSP will be paid from the first full day of sickness absence, not from day four.
   
   From October 2026    
       
   
2. Tipping  
   
   Employers will need to:
   
   a. consult with workers or their representatives before creating a tipping policy.
   
   b. update their tipping policy every 3 years – most restaurants made new tipping policy in circa Oct 2024 due to Employment (Allocation of Tips) Act 2023 which required them to pass 100% tips to employees, so due date for update of tipping policy will be in Oct 2027.
   
   
3. Employment tribunal time limits
   Time limits for making a claim to an employment tribunal will increase from current 3 months to 6 months.
   
   From 1 January 2027
   
   
4. Unfair dismissal – for an employee to bring an unfair dismissal claim against an employer, time period that employee needs to be in the job will be reduced from 2 years to 6 months.
   
   Other 2027 changes
   
   
5. Zero-hours and low-hours contracts – Workers will get right to guaranteed hours.
   
6. Compensation for cancelled shifts, moved to another date, or cut short by an employer.
   
7. Reasonable notice of shifts – Employers must provide reasonable notice of shifts and changes to shifts.

Sources and further reading:

1. Employer bulletin Feb 2026 re Statutory Sick Pay 
2. Employment Rights Act 2025 – Acas