Q2 2026 employment roundup: wage increases, day-one rights, and new enforcement

Overview

April 2026 marks a watershed moment for UK employment law. Three significant changes take effect within a single week, fundamentally reshaping employer obligations around pay, leave entitlements, and enforcement.

On 1 April, National Minimum Wage and National Living Wage rates increase across all age bands, with 18-20 year olds seeing the largest percentage rise. Just five days later on 6 April, the Employment Rights Act 2025 makes statutory sick pay payable from the first day of sickness (with no waiting days) and makes paternity leave and unpaid parental leave day-one rights. The following day on 7 April, the Fair Work Agency is established as a unified enforcement body, bringing together the work of the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, and the Office of the Director of Labour Market Enforcement. It also becomes responsible for minimum wage enforcement, which HMRC carries out for it under contract until April 2027.

Collectively, these changes strengthen worker protections, increase compliance costs, and significantly raise enforcement risk. Employers must update payroll systems, revise policies, and train managers before the changes take effect.

National Minimum Wage and National Living Wage increases

From 1 April 2026, all age bands see wage increases following the Low Pay Commission's recommendations. The National Living Wage (21 and over) increases, and the 18-20 year old rate sees the largest percentage rise of any age band.

Employers must update payroll systems before the first pay period starting on or after 1 April 2026. From 7 April 2026 the Fair Work Agency is responsible for minimum wage enforcement, with HMRC carrying it out under contract until April 2027. Enforcement includes inspections and Notices of Underpayment requiring arrears and penalties, and non-compliant employers can be publicly named.

Key actions: Review pay rates for all workers (including apprentices, piece workers, and salaried employees whose effective hourly rate may fall below the new minimums). Update payroll by 1 April. Check that deductions for uniforms, tools, or accommodation do not reduce pay below the minimum wage.

Day-one employment rights: ERA 2025 April phase

The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and is implemented in phases. The April 2026 phase brings day-one rights to several statutory entitlements previously requiring service periods:

• Statutory Sick Pay (SSP): Payable from the first day of sickness with no waiting days (previously SSP was only paid for a period of at least 4 consecutive days of sickness, and not for the first 3 qualifying days). No lower earnings limit — all employees are eligible regardless of earnings. Rate is 80% of normal weekly earnings or the flat rate (£123.25 a week for 2026/27), whichever is lower.
• Paternity leave: Day-one right (previously required 26 weeks' service). Statutory Paternity Pay still requires 26 weeks' continuous employment and average earnings of at least £129 a week.
• Unpaid parental leave: Day-one right (previously required 1 year's service).

Bereavement leave, including for pregnancy loss, is not part of the April changes. The government's planned date for it is 2027.

Additionally, the maximum protective award for collective redundancy breaches increases from 90 days to 180 days, for dismissals taking effect on or after 6 April 2026 — a significant cost risk for large-scale restructures.

The paternity leave, parental leave and protective award changes do not apply in Northern Ireland, where employment law is devolved. The SSP changes do apply in Northern Ireland.

Key actions: Configure payroll systems to pay SSP from day one with no earnings test. Update sickness absence policies to remove references to waiting days. Review and update family leave policies to remove service requirements. Train HR and line managers on day-one eligibility. Communicate new entitlements to all employees.

Fair Work Agency launch

The Fair Work Agency (FWA) is established on 7 April 2026 as a new unified employment enforcement body, an executive agency of the Department for Business and Trade chaired by Matthew Taylor. It brings together the work of the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority (GLAA), and the Office of the Director of Labour Market Enforcement. It has statutory responsibility for National Minimum Wage enforcement, which HMRC carries out under contract until it fully transfers to the FWA in April 2027.

The FWA enforces National Minimum Wage and National Living Wage (including underpayments, record-keeping, and arrears), employment agency and employment business regulations, gangmasters licensing, and modern slavery and labour exploitation. The Act also provides for it to enforce statutory sick pay and holiday pay, and for the Secretary of State to bring employment tribunal proceedings in place of a worker who is not going to bring them. When checked on 15 September 2026, those powers had not been brought into force; the agency is preparing to enforce holiday pay from 2027.

For National Minimum Wage, enforcement officers can inspect records and issue Notices of Underpayment and penalties. Employers should expect a more co-ordinated enforcement approach across the areas the FWA covers.

Key actions: Review compliance across the FWA's current enforcement areas (NMW, employment agency standards, gangmasters licensing, labour exploitation). Ensure records are audit-ready. Train managers on enforcement risk. Consider engaging specialist employment law advice if you operate in high-risk sectors (hospitality, retail, care, logistics).

Combined action checklist

Employers must take the following actions before April 2026:

• By 1 April 2026: Update payroll systems with new NMW/NLW rates. Review all worker pay rates including apprentices, piece workers, and salaried staff.
• By 6 April 2026: Configure payroll to pay SSP from day one with no lower earnings limit. Calculate 80% rate for all employees. Remove waiting days from sickness absence policies.
• By 6 April 2026: Update family leave policies to remove service requirements for paternity leave and parental leave.
• By 6 April 2026: Update HR systems to process leave requests from day-one employees.
• Before 7 April 2026: Audit compliance with the NMW, employment agency standards and, where it applies to you, gangmasters licensing. Ensure payroll records are audit-ready.
• Ongoing: Train HR staff and line managers on day-one rights, SSP calculation, and Fair Work Agency enforcement powers.
• Ongoing: Communicate new entitlements to all employees through handbooks, intranet, and team briefings.

Northern Ireland: devolved employment law

Employment law is devolved to Northern Ireland. The Employment Rights Act 2025 mostly does not apply in Northern Ireland. Day-one paternity leave and parental leave entitlements do not take effect on 6 April 2026 for Northern Ireland employers or workers. The SSP changes do: from 6 April 2026, SSP in Northern Ireland is also payable from the first day of sickness with no lower earnings limit (sections 12 and 13 of the Act).

If you operate across Great Britain and Northern Ireland, you must maintain separate family leave policies. National Minimum Wage rates apply UK-wide and increase on 1 April 2026 in Northern Ireland.

Monitor the Northern Ireland Assembly for any equivalent legislation.