National Insurance changes & day-1 rights could see shifts in hiring strategies
With the new Labour Government have come many changes (both actioned and announced) including the recent Employer’s National Insurance contributions…
Big changes to the world of work have been on the horizon for a while and the Royal Assent of…
Big changes to the world of work have been on the horizon for a while and the Royal Assent of the Employment Rights Bill means they’re officially here – well, almost.
Finally reaching the finish line, the Employment Rights Bill received Royal Assent in December 2025, transforming it into the Employment Rights Act (ERA) 2025, making it law.
With HMRC celebrating it as “bring[ing] the world of work into the 21st century”, it’s estimated over 15 million workers across the UK will benefit from these new laws. But while the law is now official, the rollout of headline changes won’t come until later – across various dates in 2026 and 2027.
Whether you’re a recruiter, end client or an employer, here’s the latest on the Employment Rights Act 2025 and how to stay ready.
Part of the government’s Plan to Make Work Pay, the Employment Rights Bill was designed to (in short) make work fairer and more secure, while cracking down on employer practices that the government sees as exploitative. Specifically, it covers:
It all has a motive to grow the economy, boost wages and reduce insecure work and non-compliance.
Before anyone panics, right now, not much has changed.
The ERA did reach Royal Assent (officially approved by the King as an Act of Parliament), but the government will be using a phased approach to give businesses time to implement and adapt to these changes.
In their July 2025 Employment Rights Bill roadmap, the government noted that commencement dates will line up with commonly used dates i.e. 6th April and 1st October. So there (hopefully) shouldn’t be any surprises!
Out of the gate, the only measures introduced from Royal Assent of the Act include the repeal of the Strikes (Minimum Service Levels) Act 2023 and some parts of the Trade Union Act 2016.
The ERA has plenty in store for us over the next 2 years. As it stands, the roadmap of changes includes batches across 2026 and 2027.
Disclaimer: the following is a brief overview based on current information as of the date of publishing. Implementation of these changes are subject to government consultation. For a more exhaustive list of changes, please check government websites.
Stated in the legislation as coming into effect 2 months after the Bill became law, a couple of changes taking place include:
Probably bringing some of the most notable changes, April 2026 brings the first of the Day-1 Rights and other protections with it, including:
October 2026 is expected to bring more major changes like:
2027 is shaping up to be a big year for workers’ rights too. While the government hasn’t pinned down exact dates yet, we do have a general idea of changes coming our way:
2027 could also bring more changes to:
The Employment Rights Bill has been on a long journey, with plenty of new amendments tabled – but not everything proposed made the final cut. A couple of notable cuts include:
If you’ve followed the Act from the beginning, you may recall the government’s original proposal was for protection from unfair dismissal to be a right from day 1 of employment. It became a sticking point in debates, so it was agreed that a six-month qualifying period was a more balanced solution for both employers and employees alike.
MP Nick Timothy tabled amendments (Amendment NC12) to ban the inclusion of substitution clauses that allow employees, workers or dependent contractors to appoint a substitute to supply services or undertake work on their behalf.
Being withdrawn after debate, it was determined that this new clause would create a whole range of unintended consequences, exclude people from carrying out legitimate business activity and impact more than just a narrow group of workers.
Baroness Penn also tabled amendments (Amendment 280), arguing that substitution clauses are loopholes that allow companies to pass on the responsibility of right-to-work and criminal checks onto contractors.
The proposal was to restrict the use of substitutes by requiring company directors to keep a register of dependent contractors with the aim to make sure “employment rights are upheld [and] pay is not suppressed through illegitimate competition”.
But as with Timothy’s tabled substitution clause amendment, Penn’s contribution was withdrawn after debate raised concerns over the “significant additional reporting burdens” it would place on businesses.
For employers, agencies, umbrellas and end clients alike, all these changes will have you wondering “but what do I need to do?”.
The answer will be very much dependent on your type of business, how you work and who you work with. But generally a good approach will be:
The first step is to understand what’s changing and what will impact you/your business. The above is a good starting point – make a note of anything you think is relevant and go away and research it. The government’s collection of Employment Rights Act factsheets is a good place to find more details.
After you get your head around what’s changing with the ERA, you need to understand what that means for you. Having an awareness of what you’re responsible for will outline where your liabilities are and what risks you need to prepare for.
Many changes will impact employment rights and as they come into effect any relevant policies or processes will need to be updated. These should also be easily accessible to employees.
If you engage or employ contractors, you need to be very clear on their worker status and the difference between ‘employed for tax purposes’ and ‘employed for employment law purposes’.
A contractor could be determined as ‘self-employed’ for tax purposes, but as an ‘employee’ in employment law and therefore entitled to employment rights.
With so many moving parts coming into force through 2026 and 2027, the Employment Rights Act isn’t just a compliance exercise – it’s a shift in how risk shows up across your projects, your people, and your supply chain.
The ERA introduces new layers of financial exposure that businesses can’t afford to overlook. And that’s exactly where the right business insurance becomes more than a safety net.
Whether it’s protecting against employment disputes, HMRC enquiries into tax compliance, or ensuring your contractors and subcontractors are fully covered, now is the perfect moment to review your policies and prepare for new risks.
Whether you’re a recruitment business, accountant, or provide professional services to contractors and freelancers, partnering with Kingsbridge not only means you benefit from expert insurance & IR35 advice and support, your contractors do too – we can help them secure comprehensive Contractor Insurance including fundamental cover like PL, PI, personal accident and more.
As a Partner, referring contractors could also offer an extra revenue stream – talk to one of our in-house specialists to find out more. You can get in touch online or call on 01242 312 564.