Changes to Employment Law 2026

The current Labour Government has committed to strengthening rights for employees. There are several changes to employment law in the UK coming soon under the Employment Rights Act 2025.

Note this is a brief overview. You should check the ACAS website for more details.

The new Fair Work Agency legislation (launching from April 2026) consolidates enforcement of existing employment rights including National Minimum Wage (NMW), Statutory Sick Pay (SSP), agency worker protections, holiday pay, self-employment vs employment and other workplace rights.

For example, if you treat someone as self-employed when they are legally entitled to employee benefits, the Fair Work Agency legislation may enforce their rights more actively. You need to be confident that your employment processes are legally compliant and well-documented.

You need to check — does your assistant need to be employed? While DfE and Ofsted do not have a view, the EYFS (3.104) states you must comply with 'employment laws' and part of that is ensuring they have employment rights if they are eligible: Check Employment Status for Tax

It might be useful to look at what is changing and how it might affect you, if you are a childminder with an assistant. The main employment changes are coming to:

Flexible Working Rights

All employees can request flexible working arrangements from day 1. This might mean a new assistant asking you for part-time hours, adjusted start times or remote working options (where practical). If you refuse to allow the flexible working conditions, your refusal must be 'reasonable' and documented. If you rely on part-time staff or shift workers to cover ratios, you will need to consider what this change might mean to you.

Harassment Legislation

From October 2026, you will be legally required to take 'all reasonable steps' to prevent harassment related to the protected characteristics (Equality Act 2010) which are in place to safeguard individuals from discrimination, harassment and victimisation. The protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. Under whistleblowing legislation harassment will become a qualifying disclosure. Whistleblowers will be protected and you will be directly liable for harassment of your employees by third parties if you fail to take steps to prevent it happening.

National Insurance

The employer National Insurance contribution rate is 15% (up from 13.8%) and the threshold for when National Insurance applies has been lowered so small earnings now attract NIC. This means that you will need to pay more NIC on your assistant's wages — but the employment allowance has also increased (if you qualify).

National Minimum Wage

From April 2026, there will be new transparency legislation around fair distribution of tips or bonuses — for example, parent gifts or financial incentives — and the Government will aim to ensure consistency in pay across comparable roles. For example, if you have 2 assistants and one of them claims the other receives more pay for the same job roles, you will need to have clear justification for your payment decisions.

New payroll rates from 1st April 2026:

• National Living Wage (age 21+) increases to £12.71 / hour
• 18–20 year old rate increases to £10.85 / hour
• 16–17 year old and apprentice rate increases to £8.00 / hour

These are mandatory minimum rates when you pay your assistant and must be reflected in payroll and contracts. Statutory maternity, paternity, shared parental, adoption, bereavement and neonatal pay all increase as well — see the ACAS website for more details.

Parental / Paternity Leave

From April 2026 assistants will have day 1 rights to parental/paternity leave. This means they can start working and immediately go on 2 weeks of paid parental/paternity leave.

PAYE and Payroll Reporting

From April 2026, the Government will require real-time digital payroll reporting changes if you are affected by Making Tax Digital (MTD) for income tax. This will mean PAYE will need to include more information about hours worked and pay periods. You might need to review your payroll software if you calculate it in-house.

Pay Gaps and Menopause

Companies with more than 250 employees will need to create action plans around gender pay gaps and menopause — these will be voluntary in 2026 and mandatory from 2027. While this will not be required for small companies you might want to consider how you ensure, for example, that menopausal staff members are supported in the setting.

Pension Enrolment

From April 2026 eligibility for auto-enrolment into workplace pensions will be for all qualifying employees aged 18 and over (currently age 22 and over). The earnings threshold remains the same, but you should note that it is under review. If your assistant wants to start a pension, you will need to start contributing to their pension (a minimum of 3% of an employee's qualifying earnings) which will increase your payroll costs.

Redundancy Rights

Under current legislation if you want to make an assistant redundant you must give them proper individual consultation and notice, pay statutory redundancy pay if they qualify (depending on length of service and age), and follow fair dismissal law — for example, explain why the role is redundant. Legislation around redundancy rights is changing from 2026 if you have more than 20 employees.

Statutory Sick Pay

From 6th April 2026, Statutory Sick Pay (SSP) will be payable from day 1 of employment without any minimum earning threshold (available for everyone regardless of hours or pay level). SSP will also be calculated at 80% of average weekly earnings or the statutory flat rate, whichever is lower. This means you could start an assistant and they immediately go on sick leave and qualify for SSP for up to 28 weeks. Note that, while on sick leave, your assistant will continue to accrue paid holiday entitlement.

What Next?

You will need to:

• Review your staff/assistant contracts to ensure they reflect the new legal entitlements.
• Update payroll from 1st April with the new minimum wage entitlement.
• Budget for the earlier Statutory Sick Pay entitlement, changes to pension contributions and payroll.
• Notify staff about the changes and review and update staff handbooks.
• Update and implement staff sickness and any other relevant policies.
• Review your documentation to ensure you record hours, pay and holiday pay accurately.
• Update record keeping to ensure claims of third-party harassment (protected characteristics) or flexible working requests are documented. You might want to do some training to cover the new legislation.
• Check your assistant's employment status — especially if you currently treat them as self-employed when their working pattern (hours of work or working expectations) suggests employment.

Future Changes

You should also keep an eye out for future changes. There are more changes due in 2027 to further strengthen worker rights including, for example:

• Compensation when booked shifts are cancelled with little or no notice.
• Improved 'fire and re-hire' restrictions to protect staff from this practice.
• Enhancements to bereavement leave.
• Changes to flexible work pattern rights to give assistants broader protections.
• Increased record keeping requirements for annual leave and pay.
• Improved unfair dismissal rights from 6 months (currently 2 years).
• The right to request predictable working hours — note that the news headlines talked about 'banning zero-hour contracts', but this expected change to legislation has been diluted.