Employment, contingent workforce and immigration | UK Regulatory Outlook March 2026

Employment

The government is pushing forward with its programme of employment law reforms and the new statutory rights and obligations set out in the Employment Rights Act 2025.  

Visit Osborne Clarke's dedicated employment law reforms microsite for the latest updates on implementation dates and practical considerations, and join us at our webinar on 9 April 2026 about what employers and agencies should be doing to prepare for the 2026/2027 reforms. 

New employment laws in force in April 2026  

A number of legislative reforms will come into force on 6 April, and the government has published new guidance and consultations.  

On 6 April, businesses will see: 

• doubling of maximum protective award from 90 to 180 days' pay per affected employee for collective redundancy consultation failures;
• statutory sick pay payable from day one of absence with the removal of the lower earnings limit;
• statutory paternity leave and unpaid parental leave become day one rights and employees will be entitled to take paternity leave before or after shared parental leave;
• a new right to bereaved partners paternity leave;
• protected disclosures expressly extended to include sexual harassment concerns;
• simplified processes introduced for trade union recognition; and
• a new requirement to keep holiday pay records for six years. 

The new Fair Work Agency is also set to launch in April 2026 (see further, in contingent workforce section below).  

New umbrella company tax legislation which introduces joint and several tax liability between umbrella company and agency (or in some cases, end hirers) for any failure by the umbrella company to pay full PAYE and NICs to HMRC will also come into force on 6 April. 

Increases to statutory pay rates  

April will also see increases to the statutory minimum wage and the statutory minimum pay rates and family leave rates coming into effect.  

Increase to tribunal compensation awards and the rate of a week's pay 

The limits that apply to certain awards in employment tribunals have been announced (which, as applicable, will apply to dismissals where the effective date of termination falls on or after 6 April 2026) including: 

• The limit on a week's pay increases from £719 to £751.
• The maximum compensatory award for unfair dismissal increases from £118,223 to £123,543.
• The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £8,763 to £9,157.
• The limit on the compensatory award for failure to have a written tips policy, or for failure to allocate and pay tips fairly, increases from £5,135 to £5,366. 

The government still plans to remove the cap on the compensatory award for unfair dismissal from 1 January 2027. 

Current consultations  

The government's commitment to undertake "extensive engagement and consultation" on the implementation of its Plan to Make Work Pay and the Employment Rights Act 2025 has seen a number of consultations published including on flexible working; strengthening the law on tipping; fire and rehire; and changes to expenses, benefits and shift patterns; the recognition code of practice and balloting unfair practices; and modernising the agency work regulatory framework. 

The outcome of these consultations will shape future regulations bringing the reforms in the Employment Rights Act 2025 into force. 

Gender pay gap and menopause action plans 

The government has published new guidance to help employers take practical steps to support women at work. Announced on 4 March 2026 by the minister for women and equalities, Bridget Phillipson, this marks a significant moment for workplace equality - and one that employers should start preparing for now. Equality gender pay gap and menopause action plans will become mandatory from 2027 for large employers with 250 plus employees.  

Ethnicity and disability pay gap reporting  

The government has published an announcement confirming its commitment to introduce mandatory ethnicity and disability pay gap reporting for large employers. Firms with 250 or more employees will be required to publish six key pay gap metrics and new workforce composition data.  

It has also published the response to its earlier consultation stating that this shows "widespread support for mandatory ethnicity and disability pay gap reporting by large employers to increase transparency and help tackle barriers in the workplace". 

The consultation response also features indicative clauses for the new legislation and how it will work in practice. This has been drafted in collaboration with businesses that are already reporting on their ethnicity and disability pay differences on a voluntary basis. Legislation will seek to build on the current gender pay gap reporting to simplify the process and make it easy for employers to record their data. 

The government's aim is that greater transparency on pay gaps will help ensure everyone can have a fair chance to get on in the workplace, drive economic growth and make work pay. 

Contingent workforce 

Developments affecting contingent workforce arrangements continue moving towards key deadlines: 

• The UK government's consultation on modernising the agency work regulatory framework remains open until 1 May 2026, proposing to bring umbrella companies within the existing recruitment regulatory regime.
• From 6 April 2026, agency workers will gain day-one statutory sick pay entitlement, removing both the lower earnings threshold and the three-day waiting period.
• 6 April 2026 also marks the introduction of the new umbrella company tax legislation, under which agencies and end-user clients face joint and several liability where an umbrella company fails to meet its PAYE or national insurance obligations.  

Look back to last month's edition for our full analysis and practical guidance on each of these developments. 

The new Fair Work Agency launches on 7 April 2026 under the Department for Business and Trade, as a unified, single regulator and enforcement body for workers' and agency workers' rights. It will enforce the national minimum wage, agency worker rules, and address labour exploitation, with powers to investigate, penalise and prosecute non-compliant employers. The current Employment Agency Standards Inspectorate (EASI) will become part of the Fair Work Agency. 

Immigration  

Nothing to report this month.