ADP UK’s Head of Payroll Product Compliance, Ben May ChMCIPPdip MBCS has provided a summary of the Employment Rights Bill Implementation Roadmap.
Employees and employers are facing one of the biggest changes to UK employment law in 2025. With the Government’s plan to make work pay and the introduction of the Employment Rights Bill (subject to receiving Royal Assent), it’s likely we will see significant changes that have not been experienced in decades.
From day-one of employment, employees will have additional rights governed by strict regulations, meaning employers will need to act quickly to stay compliant and mitigate risk.
However, research shows that many businesses struggle with employment law compliance:
- 50% of businesses need help ensuring HR policies align with legal best practices[1]
- 45% of companies need further advice to prepare for major legal changes[2]
- 18% of business lack HR support entirely[3]
In this guide, we highlight five of the most critical changes currently included in the new bill, and how HR teams can navigate compliance, streamline documentation and mitigate legal risks.
On 1st July the Government published the Employment Rights Bill Implementation Roadmap, setting out the timeline for measures in the Bill to come into effect. You can read the full report here.
So what is a draft bill and how does it become law?
Depending on who initiates a draft bill, and the complexities of its content, it will go
through various stages in each of the House of Commons and the House of Lords. At each stage, members of the house may propose changes to be considered and included.
Typically, a bill may start in the House of Commons, pass to the House of Lords, come back to the House of Commons following the Lords' amendments, and the new version with amendments be approved by the House of Commons and then given Royal Assent.
After Royal Assent is given, the bill becomes an Act of Parliament, which is in effect law.
Sometimes Acts require amendments to secondary legislation in addition to the new legislation being enacted. More information here.
As with much of the Employment Rights Bill, the main emphasis is on the employer/employee relationship. That mostly translates to contractual obligations, HR
policies and practices. The direct impact to payroll software and payroll processes are minimal compared to the overall scope of the bill. Some of the areas with a more significant payroll interaction are explored in this article.
From April 2026: statutory sick pay, parental leave and Fair Work Agency
One key change for the upcoming tax year (2026/27) is relating to Statutory Sick Pay (SSP), where the Government will remove the Lower Earnings Limit and remove the Waiting Period.
Following the Department for Work and Pensions (DWP) consultation on Strengthening Statutory Sick Pay, the government confirmed the plan to remove the Lower Earnings Limit from the eligibility criteria and will be replacing it with a percentage rate of 80% of normal weekly earnings. This will allow those earning below the Lower Earnings Limit to receive 80% of their average weekly earnings or the current SSP flat rate, whichever is lower.
The Period of Incapacity for Work (PIW) will reduce from four days to one day, along with the removal of the Waiting Period, which will mean that SSP is paid from the first day of work missed due to sickness.
As SSP is a transferred matter in Northern Ireland, the consultation outcome stated for Northern Ireland is that both governments agreed to bring forward amendments to extend these changes to Northern Ireland, including the percentage rate of 80%. This alignment is welcomed and ensures parity for employers and software.
Employers will need to review their policies and procedures to understand the impact the changes may have on their business.
The Government also plans to introduce ‘Day one’ paternity leave and unpaid parental leave from April 2026 to support working families from day one of employment. Currently employees must be continuously employed by their employer for at least 26 weeks up to any day in the qualifying week to qualify for paternity leave. Entitlement to pay will remain unchanged, however the Government are currently seeking evidence and views on parental leave and pay. Further details can be found here.
For unpaid parental leave, currently employees must have been employed for more than a year. Again this change will allow employees the right to unpaid parental leave from day one of employment, as long as they meet the other qualifying conditions.
The introduction of the Fair Work Agency (FWA) will bring together various organisations from April 2026 into a single enforcement body. The FWA will take on enforcing National Minimum Wage (NMW), along with Holiday Pay and SSP enforcement. This suggests there will be more scrutiny on employers in these areas.
From 2027: Gender pay gap, menopause action and bereavement leave
The Government roadmap for 2027 includes Gender pay gap and menopause action plans, which will be introduced on a voluntary basis in April 2026. The aim is to promote gender equality and support women's health in the workplace.
Details are not yet available, however from what has been published so far it appears that this item is not going to impact payroll. The action plan is - as the name suggests - an employers' plan of action to improve gender equality in the workplace and support
employees during menopause, using evidence-based actions and with guidance from the government on what actions are most effective.
Also in the 2027 roadmap is Bereavement Leave. In addition to the existing Statutory
Parental Bereavement Leave and Pay, the Employment Rights Bill is going further to extend employees’ rights to be given time to grieve with job security. This will include pregnancy loss where the loss occurs before 24 weeks, which is currently outside the scope of any statutory leave regulations.
It is intended to cover a wider scope and encompass other relationships to the employee. The exact scope of relationship to the employee covered under the legislation is yet to be published.
Ending the exploitative use of zero hours contracts is an area which, while not directly a payroll function, may see some data capture changes. Obligation on employers to pay employees where the employer has cancelled/moved or curtailed shifts is included in the current draft bill. Wording currently suggests that the employee be compensated by no more than the amount they would have been paid had the shift been worked in full. Data capture and recording of this will be important for NMW purposes, as will the guidance from HMRC on whether this compensation would be considered as time worked or absence time.
Current publications have said the Government intend to produce clear and comprehensive guidance to help organisations navigate the changes. It is intended that guidance will be made available in advance of implementation deadlines to allow time for familiarisation and preparation.
Conclusion
The Employment Rights Bill is reshaping the way businesses hire, manage and retain employees. Whilst the Bill makes its way through the Parliamentary process, with Royal Assent expected in September 2025, HR leaders should remain aware of the changes being brought about by reviewing their policies and procedures and considering what these rights mean for their workforce and take steps to prepare for the change.
Failing to adapt could lead to increased tribunal claims due to stricter dismissal protections, along with compliance fines for mishandling flexible work requests or worker classifications.
That’s where ADP can help.
- ADP Backcheck ensures you hire the right candidates with legally compliant background screening, reducing early-stage dismissal risks.
- ADP HR Everywhere will also keep up to date with any further changes or additions to the Bill, advise on implementation dates and as soon as the Bill becomes law allow you to download advice to help you be compliant.
- Expert support on flexible working and worker classification, ensuring your business is protected from legal pitfalls.
- 24/7 employment law advice, legislation tracking and legally compliant HR templates to help you stay ahead of new regulations with ADP HR Everywhere.
ADP award winning payroll helps maintain compliance with evolving employment laws, back by 8,500+ compliance experts and HRMC-recognised processes.
Speak to one of our team today to find out more
[1] Page 4 of the “ADP HR everywhere legal service” download adphreverywherebrochure1730731951607.pdf
[2] Page 4 of the “ADP HR everywhere legal service” download adphreverywherebrochure1730731951607.pdf
[3] Page 4 of the “ADP HR everywhere legal service” download adphreverywherebrochure1730731951607.pdf
Commonly Asked Questions & Answers
1. How will hiring decisions get impacted by day-one employment rights?
to guarantee equitable treatment from the start, including safeguards against wrongful termination. This makes thorough hiring and screening procedures even more crucial.
2. How will Statutory Sick Pay be altered in 2025?
From 6th April 2026, SSP will be paid at the weekly rate of SSP, (currently £118.75) or 80% average weekly earnings, which ever is lower. SSP will also be paid from their first working day of sickness absence.
3. Does the proposed new law still allow zero-hour contracts?
Yes, however contracts will need to reflect their usual hours and include provisions for shift changes and cancellations must be made available to employees.
4. Can workers ask for flexible scheduling right away?
According to the Employment Rights Bill , companies will need to go through a formal consultation process before rejecting an employee's request for flexible working hours.
5. What dangers come with breaking the Employment Rights Bill?
Tribunal claims, fines, and enforcement proceedings may result from noncompliance
6. How will employment law be enforced by the Fair Work Agency?
The FWA will bring together existing state enforcement functions and over time will take on enforcement of a wide rage of employment rights. This will be a single place where workers and employers can turn to for help.
7. How can HR departments get ready for the new employment regulations?
HR should ensure contract compliance, train hiring managers, review and update policies, and put in place tools for monitoring changes to the law.
8. Does the Employment Rights Bill impact the right to parental and bereavement leave?
Indeed, new rights for pregnancy loss before 24 weeks will be implemented, and parental and bereavement leave will be applicable from day one.
9. How can companies handle more compliance obligations without running the danger of going to court?
Businesses may stay compliant and lower their legal exposure by utilising automated HR solutions, legal templates, and professional assistance.
10. What assistance does ADP provide in relation to modifications to UK employment law?
Through its HR Everywhere platform, ADP offers legally compliant background checks, policy templates, legislative tracking, and round-the-clock HR guidance.
11. In light of the legal changes planned to be introduced from 2026 , how should employment contracts be modified?
Day-one rights, sick pay adjustments, flexible work schedules, and safeguards for temporary or agency employees should all be included in contracts.
12. What sanctions might the new Employment Rights Bill impose on employers?
If an employer violates any aspect of the Bill, they could be subject to enforcement measures, tribunal claims, or monetary penalties.
13. Does the Employment Rights Bill have an impact on dismissal and disciplinary policies?
Indeed, stricter safeguards require that disciplinary and termination procedures be meticulously recorded and consistent with the law from the start.
14. What software or solutions support HR departments in maintaining legal compliance in the UK?
To remain ahead of legal developments, solutions such as ADP HR Everywhere provide automated alerts, legal templates, compliance tracking, and professional assistance.
