Employment Rights Act 2025: Data Shows Small Businesses Are Still Missing Key Changes
- hrbytj
- 6 days ago
- 3 min read
It’s been just over a month since the latest employment law changes came in.
For many small businesses, the initial rush of emails, webinars and updates have slowed down (phew)! However, data from Breathe HR suggests while awareness of these changes is high, implementation is now lagging behind.
In this blog, I'll be breaking down the top 3 areas where small businesses are still exposed and some clear advice on fixing them.
Statutory Sick Pay Changes Under the Employment Rights Act 2025
One of the biggest changes introduced in April 2026 was the update to Statutory Sick (SSP).
The government made:
SSP a day-one right, by removing the 3-day waiting period and
removed Lower Earnings Limit.
Where Small Businesses Are Still Getting Caught Out
Many businesses (and I've seen it) are still operating under the old rules.
The Risk for Employers
business owners and managers not being up to date with the new rules
sickness policies still referring to the old three-day waiting period
payroll systems not being updated
If an employee is incorrectly told they are not entitled to SSP during the first few days of sickness absence or have not been paid for their sickness absence, your business could already be in breach of the new legislation.
Reduce the risk now:
ensure managers are fully trained and understand the new SSP rules
update sickness absence policies
review your payroll processes & speak with your payroll provider
Family Leave Changes Small Businesses Need to Review
Paternity leave and unpaid parental leave are now day-one entitlements. Previously, employees needed a qualifying period of service before becoming eligible.
The Risk for Employers
outdated employee handbooks and policies
contracts that reference incorrect eligibility periods
Reduce the risk now:
Carry out a full document review to ensure:
family leave policies are up to date
eligibility wording reflects current legislation
managers are applying policies consistently
This doesn't mean rewriting everything from scratch - a few key updates will usually make your documents compliant.
Fair Work Agency Changes and HR Record-Keeping Requirements
The launch of the Fair Work Agency (FWA) on 7 April 2026 marked a significant shift in employment law enforcement.
The FWA now has powers to inspect employer records relating to:
holiday pay
sick pay
National Minimum Wage compliance
However, one of the biggest areas still being overlooked is record-keeping. Employers are now expected to keep detailed holiday and holiday pay records for up to six years.
In many small businesses, holiday records still rely on:
spreadsheets
handwritten notes
manual calculations
The Fair Work Agency can requests a clear audit trail of records at any time. If this cannot be produced, penalties could be significant.
Now is a good time to:
move records into a centralised HR system
improve consistency
ensure holiday calculations are clearly documented and kept up to date
Good record-keeping will ensure legal expectations are being met and give business owners clarity and peace of mind.
More Employment Rights Act 2025 Changes Are Coming in October
The April changes were Phase One of the 2025 Employment Rights Act. The next roll out is coming in October 2026, and this will bring expanded trade union rights, new sexual harassment duties and longer tribunal time limits.
Don't leave it any longer - act now and get on top of the changes. By closing the gap in your contracts, payroll, and record-keeping now, you aren't just avoiding hefty fines, you're building a more transparent, professional workplace for your team!
HR Support for Small Businesses | Surrey | HR by TJ
Is your business fully compliant?
Contact me and book in for a HR Health Check now.
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