Employment law updates - important changes for employers The Legal Partners

Estimated reading time: 4 minutes

This article summarises the routine employment law changes that came into effect from April 2026.

These include increases to the National Minimum Wage and National Living Wage, updates to statutory payments including SSP and family-related leave payments, changes to the maximum week’s pay used when calculating statutory redundancy pay and unfair dismissal awards, and revised compensation limits for employment tribunal claims.

As well as these annual changes, the Employment Rights Act 2025 (ERA), which was enacted in December 2025 introduces significant wider reforms to employment law. Several key ERA measures are already in force from April 2026, with further reforms due to be implemented in October 2026 and throughout 2027.

For the latest details of the ERA implementation plan, and practical steps businesses can take now, please see our dedicated guide (lnk) “Implementing the Employment Rights Act 2025: timelines, updates & practical tips for employers”.

1 April 2026 Increases to National Minimum Wage and National Living Wage

National Living Wage (for those 21 and over) increased to £12.71 an hour, up from £12.21.

National Minimum Wage for 18-to-20 year-olds increased to £10.85 an hour, up from £10.00.

National Minimum Wage for those under 18, and for apprentices increased to £8 an hour from £7.55

The daily accommodation offset rate is £11.10. This represents the maximum amount employers can deduct daily from an employee’s minimum wage pay for providing living accommodation.
This is the amount that employers can count towards the NMW or NLW when they provide accommodation to workers.

(The increases to the younger age bands continue the Government’s longer-term objective of moving towards a single adult rate for workers aged 18 and over. The 18-to-20-year-old rate has seen particularly significant increases over the last two years as part of that policy. The Employment Rights Act will eventually remove what the Government describes as “discriminatory age bands” so that all adults of 18 and over are entitled to the same minimum wage.)

Our one page Factsheet provides an an overview of all the increases to the NMW, statutory and tribunal awards payments and limits.

Download our Employment Law Factsheet: 2026- 2027 Annual increases to statutory tribunal award payments

Download: 2025 – 2026 Annual increases to statutory tribunal award payments _Employment law Factsheet

2. April 2026 annual increases to statutory payments 2026-2027

Statutory maternity pay rises £187.18 to £194.32 per week from 5th April 2026.

Statutory paternity, adoption, shared parental, parental bereavement and neonatal care pay similarly rise from £187.18 to £194.32 per week from 6th April.

Statutory sick pay rises from £118.75 to £123.25 per week from 6th April 2026.

Note that under the Employment Rights Act 2025, from 6th April 2026, SSP will be paid from day 1 of sickness, with the removal of the 3 day waiting period and the lower earnings threshold to qualify. From 6th April 2026 the rate of SSP is now set at whichever is the lower of the flat rate £123.25 per week or 80% of the employee’s weekly income. Ensure payroll systems reflect this and, plan for more short term sicknes absence.

3. April 2026 Increases to compensation limits and minimum amounts that apply regarding certain tribunal awards

The cap on the compensatory award for unfair dismissal also increases from £118,223 to £123,543 (or 52 weeks’ pay, whichever is lower).
Remember that subject to relevant statutory instrument being passed and the exact date being confirmed, the cap on the compensatory award for undair dismissal is being abolished for dismissals occuring in or after January 2027.

The limit on a week’s pay used for calculating the unfair dismissal basic award, and statutory redundancy pay among other things, increases from £719 to £751.

Steps to take now

If you haven’t already, update your family policies to include provision for neonatal care leave, and make sure that employees are aware of the changes.
More information on the family friendly laws that came in 2023 and 2024, and including the expansion of free childcare support in Autumn 2025, can be found in Ann Gibbon’s article on recent laws supporting new parents.

For more information or queries about issues discussed in this article, please contact Megan Bowen by email.

To speak directly with or any other of The Legal Partners team of specialist business and HR lawyers based at our Richmond UK office, or our partner lawyers in Singapore, please call +44 208 255 1914

For more information or queries about issues discussed in this article, please contact Megan Bowen by email.

To speak directly with Megan or any other of The Legal Partners team of specialist business and HR lawyers based at our Richmond UK office, or our partner lawyers in Singapore, please call +44 208 255 1914

"The Legal Partners assisted us in the purchase of plant & tool company. They were an absolute pleasure to work with and tenacious throughout. Their advice and guidance from start to finish was not only professional and knowledgeable but was always clear, helpful & easy to understand. Without question, they went over and above for us and genuinely cared that we got the correct outcome"

Iain Praine, Director, Eveready Hire Ltd

"We have been with The Legal Partners for over 10 years now and would highly recommend their services.

The team are friendly, and very responsive, making legal requirements easy to understand. Megan always follows up with calls and texts, it’s like having a safety net, making sure that nothing is missed, which is ideal because when you're busy, things can get missed"

Alistair Barrigan, Founder, Barrigan’s Gardens & Landscapes Ltd

"We have received some exceptionally sure-footed and robust advice and guidance from Richard Mullett that steered us to an optimal outcome in a difficult and sensitive case that required not only competence but careful, acute judgement. Richard was clear, focused and succinct throughout and instilled utter confidence, such that I don’t think we could have been better supported.

We would not hesitate to turn to The Legal Partners again should we need an HR Solicitor"

Martin

Business client

"A top class legal team, very focussed on delivering results.

The Legal Partners deliver an exceptional and great value service. The legal expertise is combined with hard work and a genuine empathy for their client, but what you appreciate most is the approach. They help steer you through the most complex and often frustrating situations, with excellent planning, clear strategy and very valuable personal coaching. They provide confidence and clarity to help you perform better and together you achieve the best outcomes.

Most importantly they are highly efficient with their time, always keep you aware of the costs and for a busy legal team, happy to go the extra mile when you need it most"

Chris, Accountant

Client

"
Abigail’s help and knowledge is invaluable! As the HR director of the small company I feel safe in the knowledge that Abigail is always there to provide easy to understand, up-to-date and tailored advice, tips and longer term strategies for best practice for HR for me and the people working in my company. It's just so helpful to have the HR Network, receiving the information and sharing the discussions with other HR people
"

Emma Crabb, HR Director, The Other Media, Innovative Digital Agency based in London

"Richard and I worked together for several years when we were both corporate lawyers at Slaughter and May. Richard was a great pleasure to work with, showing great commitment in supporting and meeting clients’ objectives. He provided advice with clarity, efficiency and focus on the key issues. I am sure that he brings the same qualities to the services provided by The Legal Partners"

Tim Clark, Former Senior Partner at Slaughter and May

"
Richard and his team provided invaluable help, guidance and support for two major transactions. His knowledge and expertise helped ensure both went through in a timely fashion, with potential choppy waters skilfully navigated. He was always available at the end of the phone, or face to face. In negotiations with the other party, I was clearly better briefed and prepared. I would recommend The Legal Partners without hesitation
"

Roger Martin, Managing Director, Coiled Spring Games Limited

"I recently requested some help which was generously and promptly forthcoming. Have found Richard and colleagues to be most knowledgeable, personable and helpful. Attended a recent in-house Network Seminar which has confirmed my original impressions. If you want legal precision and employment insulation, I know of no firm which offers a better service and could save you a lot of time, effort and money in the process. Highly recommended"

Business client based in Richmond

"Without The Legal Partners, the handbook would have taken six months and cost three times as much in terms of management time. That kind of thing can be mundane, but their service of giving us a template for a handbook and then collaborating with us was amazing. It meant I was able to give my Director the solution of sourcing a legally drafted template, then fine tuning it in consultation with authoritative and professional legal advice to produce a cost effective, fit-for-purpose, fully compliant handbook"

Sarah East, Former HR Manager, FourWalls Ltd