The Employment Rights Act 2025: What it means for organisations and how to stay compliant

The Employment Rights Act 2025 introduces the biggest shift in UK employment law for more than a decade. From April 2026, organisations will face 28 major reforms and 173 legislative changes, each of which carry new, tougher compliance regulations, increased operational costs, and a higher chance of legislative breaches.

Organisational leadership and HR teams need to understand that this is not a policy update, it’s a complete overhaul and structural change in how organisations manage all kinds of absences. This means a change in sickness policy, bereavement leave, harassment prevention (in particular, sexual harassment), menopause support and your organisation's wellbeing policy in conjunction with UK health and safety laws.

Organisations cannot rest on their laurels and hope for the best in the face of these changes. They need to be prepared and ready to change policies and workforce wellbeing support systems in the face of the Employment Rights Act 2025. Your people and leadership teams need to know what the changes mean to your organisation, what issues may arise and how to remain compliant with changes to maximise your organisations success and bottom line.

What will the commercial impact of the Employment Rights Act 2025 be?

The Employment Rights Act signals one of the biggest changes to UK employment law in a generation. The act will help reshape and reconfigure a variety of different organisational and operational aspects of the workplace, including:

• Increased absence costs

• Workforce capacity and allowances

• Legal compliance

• Leadership accountability

• Operational resilience and efficiency

1. First Day Statutory Sick Pay

From April 6th 2026, the most substantial change will come into effect regarding Statutory Sick Pay. Under the Employment Rights Act 2025, SSP will become available from day one, with the lower earnings limit removed. In turn, these changes will mean:

• Every person in your organisations workforce will be eligible for SSP, including low-income and part-time individuals

• Eligible individuals will receive 80% of their weekly earnings or the statutory flat rate, depending on which is lower

• Increased operational costs due to the removal of Lower Earnings Limit, meaning a negative impact on the bottom lines of organisations

• Greater pressure to implement stronger return-to-work processes to prevent long-term statutory sick pay costs as well as new protections for workforce dismissals

Workplace absences cost UK organisations approximately £47 billion annually in lost output. Just in 2025, sickness related workplace absences reached a record-high of 9.4 days per person, a 62% increase from pre-2020 levels of 5.8 days lost and even an increase from 2023 where absences stood at 7.8 days lost.

Under the new laws and regulations, these absences can lead to significantly higher costs with the entire UK workforce having the right to first-day SSP. The Keep Britain Working report estimates that the direct costs of SSP stand at £10 billion annually. With the removal of Lower Earnings Limit, this figure is set to increase, costing UK organisations £450 million more a year.

Failing to manage short-term sickness can result in widespread workforce illnesses and may even result in longer-term absences. This is especially true in the case of mental-health related absences, which stand as the second and first leading cause of short-term and long-term absences respectively.

2. Day One Bereavement Leave

It is estimated that 1 in 4 people in the UK workforce experienced a bereavement in 2025. That is approximately 7.9 million people. It is estimated that this costs the UK economy £23 billion due to not only absenteeism, but also the impact of bereavement on people leading to increased rates of presenteeism. With the introduction of the right to one week of unpaid bereavement leave, this will only increase these costs further.

Under these changes, leave duration for bereavement must be a minimum of one week, and individuals have at least 56 days to take this leave. With increased absence levels due to these changes, there will be a greater need for more structured support for individuals navigating grief. Without the right wellbeing infrastructure, organisations risk prolonged absence, reduced performance and avoidable workforce disputes, disengagement and reputational damage.

3. Sexual Harassment Prevention Duties

In 2025 alone, harassment reports rose by 39%. This statistic only scratches the surface of the issue as the figures below demonstrate:

• 56% of women had been the recipient of sexually offensive jokes in the workplace

• 55% had experienced unwanted flirting, gestures or sexual remarks

• 43% report that they had been inappropriately touched

• 25% report that they had been sexually assaulted

• 48% of women reported that they had experienced harassment more than twice

• 36% had experienced it more than once

• 75% of those who experienced a form of sexual harassment did not report these incidents

Following on from these concerning statistics are the concerns that the HR and leadership teams of organisations, as many believe not enough has been done to meet legal obligations to prevent sexual harassment in the workplace. 54% of HR professionals do not feel they have done enough to comply with the Worker Protection Act whilst 41% of organisations state they have not conducted a sexual harassment risk assessment.

Under the Employment Rights Act, sexual harassment prevention and safeguarding measures aren’t just a moral obligation, they are now a legal requirement for legislative compliance. Organisations must now take all reasonable steps to prevent harassment and protect individuals who make disclosures. This includes:

• An obligation for organisations to not permit harassment of their employees by third parties

• Strengthening protections for ‘whistleblowers’

• Larger organisations must produce and publish gender equality action plans, including sexual harassment prevention measures.

Failing to mee these obligations can put an organisation at serious risk of violating UK law and incur financial and legal penalties whilst also experiencing huge reputational damage.

4. Mandatory Menopause Action Plans

It is estimated that unmanaged symptoms of menopause and a lack of support for those experiencing menopausal symptoms costs UK organisations over £200m annually. This estimate comes from studies suggesting that workplace absences caused by menopausal symptoms is costing organisations £191 million with presenteeism costing £22.4 million.

Beyond this, it is estimated that 1 in 10 women who are experiencing menopausal symptoms leave their current roles due to struggles and a lack of support. Factoring in the impact and cost of failing to support individuals experiencing menopause, there is now the need for greater support in the name of legal compliance.

As of April 2026, under the Employment Rights Act 2025, larger organisations (250+ people) can voluntarily create, publish and implement Mandatory Menopause Action Plans and by 2027, this will become mandatory. Whilst smaller organisations may feel they won’t be affected by this change; they are strongly encouraged to follow suit to avoid any being unprepared and impacted by any future decision and changes on the matter.

Menopause support is no longer a checkbox exercise. The rising costs and impact on organisations in combination with huge legal reforms and requirements makes having an effective menopause support policy and system in place an essential for organisations.

How HA | Wisdom Wellbeing Helps You Stay Compliant and Reduce Cost

Using HA | Wisdom Wellbeing’s industry leading assistance programme, our service can help your organisation circumvent the costly changes associated with the Employment Rights Act and build a culture of support through legally compliant, reliable services.

Our service offering is built and catered around the UK legislation by utilising a holistic approach to workforce wellbeing through clinically led excellence. We provide individuals and leaders within your organisation expert guidance and rapid access to support when needed to remain legally compliant, protect your people and keep your costs low.

Virtual GP Access for First Day SSP With fast access to same day GP appointments and referrals using our Virtual GP as part of our Wisdom Super Care EAP package, you can help your people bypass long NHS waiting lists and get the medical support they need to reduce short-term absences.

This can also ensure your SSP claims remain low and save on the increased costs in accordance with law changes under the Employment Rights Act helping your organisation control costs and maintain operational capacity.

Confidential Reporting for Sexual Harassment Disclosures If any individuals have any workplace concerns, have been or have experienced a form of harassment, including sexual, they can utilise our secure, anonyms reporting line SpeakUp to raise concerns safely and receive expert guidance. This helps your organisation meet its new prevention duties and demonstrate compliance.

Structured Counselling for Bereavement Leave 24/7 emotional support, structured counselling and specialist guidance reduce the risk of long-term absence caused by poor mental health whilst helping individuals return to work safely and confidently.

Specialist Menopause & CBT Support Access to menopause support specialists and evidence-based CBT tools helps you build a compliant action plan while improving wellbeing outcomes across your organisation.

Why Organisations Choose HA | Wisdom Wellbeing

• Expert-led, clinically accredited support

• Services designed around new and upcoming legislation

• Tools that reduce risk, cost and workforce disruption

• 24/7 access for your people

• Fast implementation and measurable outcomes

We help you protect your organisation with our Employment Rights Act support from rising costs and changes which can result in legal incompliance through expert solutions, support and by building an ongoing culture of support and resilience.

Frequently asked questions by HR leaders

Do we need to update our sickness absence policy? Yes. SSP entitlement and eligibility rules are changing. Reporting processes, fit note requirements and absence triggers must be reviewed immediately.

How will the changes affect return-to-work procedures? Higher eligibility and increased absence volumes mean organisations need stronger early intervention, clearer adjustments and more robust return-to-work frameworks.

Prepare Your Organisation for April 2026

The Employment Rights Act will reshape how every organisation manages people, risk and compliance. With the right support, you can reduce cost, protect your culture and stay ahead of legal change.

Book your free EAP demo today and see how HA | Wisdom Wellbeing helps you stay compliant, reduce risk and build a healthier, safer organisation.