Employment law reforms: what employers should be preparing for now
The appointment of a new Prime Minister has prompted many employers to ask whether employment law, HR priorities and workplace regulation are likely to change.
At present, there is little indication that the reforms already underway will be delayed or reversed. For employers, the more important story is the continued progression of a significant employment law reform programme which will introduce greater worker protections, strengthen enforcement and place greater emphasis on workplace transparency.
The Employment Rights Act implementation programme continues
The Employment Rights Act 2025 is being introduced in phases throughout 2026 and 2027. Key developments for employers include:
- enhanced day-one employment rights;
- expanded statutory sick pay provisions;
- stronger protections against unfair dismissal;
- increased trade union rights;
- establishment of the Fair Work Agency.
Employers should continue reviewing:
- contracts and policies;
- probation and dismissal procedures;
- family leave and sickness arrangements;
- workforce planning and contingent labour models;
- compliance and record-keeping processes.
Taking proactive steps now may help organisations manage implementation risks and avoid last-minute changes as reforms come into force.
Pay transparency is becoming a major focus
Alongside the Employment Rights Act reforms, the government’s consultation on equal pay and pay transparency could significantly affect recruitment and reward practices.
Proposals currently under consultation include:
- salary and benefits information in job adverts;
- pay information being provided before interview where no advert exists;
- stronger equal pay enforcement powers;
- a new Equal Pay Regulatory and Enforcement Unit;
- enhanced protections relating to race and disability pay discrimination.
Although these measures have not yet been finalised, employers may wish to begin reviewing recruitment processes, pay structures and reward frameworks to assess whether changes may be required.
Reporting and enforcement obligations continue to grow
Employers should also keep a close eye on wider reporting and compliance developments.
The proposed introduction of ethnicity and disability pay gap reporting for larger employers remains on the policy agenda. At the same time, regulatory attention continues to focus on:
- fair pay;
- workplace equality;
- whistleblowing protections;
- harassment prevention;
- employment rights enforcement.
These developments reflect a broader trend towards greater transparency, accountability and regulatory oversight in the workplace.
IR35 and personal service companies (PSCs)
For employers that engage contractors and consultants, there is currently no indication of any move away from the existing IR35 regime.
Instead, recent developments suggest continued scrutiny of labour supply chains, intermediary arrangements and the use of umbrella companies. Organisations that rely on flexible labour models should continue to review their arrangements and ensure that governance and compliance processes remain robust.
What should employers do now?
Our recommendations are straightforward:
- Continue preparing for the implementation of the Employment Rights Act 2025.
- Review recruitment and pay-setting processes in anticipation of greater pay transparency requirements.
- Assess readiness for future ethnicity and disability pay gap reporting obligations.
- Review contractor, personal service company (PSC) and umbrella company arrangements.
- Keep workforce communications clear and factual as reforms continue to develop.
Changes in political leadership do not alter the practical steps employers should be taking now. The current direction of travel remains towards stronger employment rights, greater pay transparency, increased reporting obligations and more robust enforcement.
Employers that prepare early are likely to be better placed to manage risk, maintain compliance and support an engaged workforce.
About the Authors
This article was jointly authored by Helen Chamberlain, Director, Moore Kingston Smith HR Consultancy, and Peter Jones, Employment Partner, Moore SGD Law.
Moore Kingston Smith Employer Services brings together specialist expertise across employment law, HR consultancy, payroll, employment tax, immigration, global mobility, employee benefits, share schemes and data protection through one integrated offering. By combining these disciplines, Moore Kingston Smith Employer Services helps employers manage workforce, compliance and people-related challenges through coordinated, commercially focused advice and support across the employee lifecycle.
