Employment Rights Bill: Key Impacts for UK Payroll & Global Mobility

• Guaranteed hours, shift notice and protections for zero-hour and agency workers 
  Workers who regularly work consistent hours over a reference period may become entitled to a guaranteed hours contract. They may also be entitled to reasonable notice of shifts and compensation if shifts are cancelled or shortened at short notice. The precise rules for the reference period will be confirmed in secondary legislation.
• Statutory Sick Pay (SSP) reforms 
  SSP will become payable from the first day of sickness, removing the current three-day waiting period. The Lower Earnings Limit will be abolished, widening eligibility to include low earners and part-time workers. SSP will be paid at the lower of the statutory weekly rate or 80 per cent of the employee’s normal weekly earnings.
• Day-one family and dismissal protections 
  Paternity leave and unpaid parental leave will become available from the first day of employment. The qualifying period for unfair dismissal is expected to reduce from two years to six months. Dismissals linked to refusal to accept contractual changes under a fire-and-rehire approach may be treated as automatically unfair, subject to specific exceptions.
• Strengthened harassment protections 
  Employers may face a requirement to take all reasonable steps to prevent workplace harassment, including harassment by third parties such as customers and clients.
• Revised collective redundancy and consultation requirements 
  The maximum protective award for failing to consult properly in a collective redundancy process may increase from 90 to 180 days’ pay. Collective redundancy thresholds may also be assessed across the wider organisation rather than by individual workplace.
• Additional proposals 
  These include potential extensions to flexible working rights, changes to trade union access and recognition processes, and expanded whistleblowing protections, particularly where disclosures relate to harassment.

Payroll accuracy, cost and forecasting 
Payroll systems will need updates to ensure SSP is calculated correctly, reflecting the first-day entitlement and removal of the Lower Earnings Limit. Organisations may see increased SSP spend and broader eligibility. Guaranteed hours obligations and shift-compensation payments may require new processes for time recording, payroll coding and audit trails. Accurately identifying workers who transition from zero-hour to guaranteed hours status will be essential. 

These changes represent a substantial shift in statutory pay administration. Employers will require clear, defensible payroll controls, consistent application of qualifying criteria and reliable data capture across HR and scheduling systems to minimise compliance risk. 

Impact on mobility and contract-based employees 
International assignees and globally mobile workers placed on UK contracts may gain access to guaranteed hours, day-one family leave and stronger dismissal protections. Mobility teams should review host-country contracts, assignment documentation and cost projections. Organisations may need to reassess how short-term and long-term assignments are structured, ensuring alignment between mobility policies, employment contracts and statutory entitlements. 

For employers with complex cross-border populations, activpayroll sees a particular need for synchronisation between global mobility, payroll and legal teams to ensure that contractual changes in the UK do not conflict with home-country terms or tax equalisation arrangements. 

Increased compliance and process complexity 
The breadth of reforms will require coordinated updates across contracts, handbooks, onboarding materials and HR systems. Processes relating to leave, sickness absence, flexible working, dismissal, redundancy and agency-worker management will all need review. Stronger evidence trails and standardised compliance documentation will be crucial, particularly where rights are triggered by working patterns or reference periods. 

Financial and workforce-planning considerations 
Employers may face higher employment costs driven by expanded SSP eligibility, guaranteed hours contracts, shift-cancellation compensation and enhanced redundancy exposures. Workforce models relying on flexibility or agency labour may need reassessment. Early planning will help organisations model cost exposure and mitigate operational disruption.

• Several provisions require secondary legislation, including the length of the reference period for guaranteed hours, criteria defining regular hours, and the detail of shift-notice and compensation rules.
• Timelines remain indicative. Some measures are targeted for April 2026, while others will be introduced later as part of staged implementation.
• Cost impact will vary according to workforce composition, particularly for employers with large populations of part-time, variable-hours or agency workers. 

• Conduct a gap analysis across policies, contracts, payroll rules and scheduling systems.
• Update employment contracts, agency-worker terms, mobility documentation and assignment letters.
• Model financial impact arising from SSP changes, guaranteed hours, redundancy liabilities and shift-compensation rules.
• Review mobility frameworks to ensure compliance with new day-one rights and strengthened dismissal protections.
• Develop a coordinated implementation plan covering HR, payroll, mobility, operations and finance, with clear internal communication and training.