UK Employers Face Major Overhaul as Sick Pay, Dismissal Rules Set to Change
Published on 07/16/2026 at 05:19 | Redaktion boerse-global.de
A new survey from Acas and YouGov reveals that British employers view the removal of the waiting period for statutory sick pay (SSP) as the most significant challenge posed by the Employment Rights Act. The findings come as businesses prepare for a multi-year transition that will fundamentally reshape sick leave, dismissal protections, and parental rights across the UK.
Sick Pay Reform Tops Employer Concerns
According to the Acas study, 30 percent of employers identified the requirement to provide SSP from the first day of an employee's illness as their most difficult upcoming hurdle. The reform, which takes effect on April 6, 2026, removes the previous three-day waiting period and eliminates the lower earnings limit for eligibility — meaning more workers will qualify for payments from day one.
Other high-priority concerns include the introduction of paternity leave as a day-one right, cited by 27 percent of respondents, and the reduction of the qualifying period for unfair dismissal protection. Currently set at two years, the qualifying period will drop to six months from January 1, 2027. Acas data shows that 23 percent of employers rank this change among their top concerns, while approximately 21 percent highlighted new trade union rights and 20 percent pointed to guaranteed hours for workers.
New employment protections aren't the only compliance challenge facing UK employers. Gaps in workplace health and safety documentation can lead to substantial penalties during HSE inspections — and many businesses are unknowingly exposed. The free Health & Safety Toolkit provides ready-to-use risk assessments, checklists, and templates that help ensure your workplace meets all key UK regulations. Download the free Health & Safety Toolkit
Legal experts note that the shortened window for unfair dismissal rights will require more rigorous probation management. Employees who begin their roles by July 1, 2026, will already be eligible for these enhanced protections when the law changes at the start of 2027. Additionally, the compensatory cap for unfair dismissal is scheduled for removal on January 1, 2027, potentially exposing employers to higher settlement costs — particularly for senior executives claiming lost equity or bonuses.
Germany Takes Opposite Approach on Sick Leave
While the UK moves to lower barriers for sick pay, Germany is pursuing a different regulatory path to address rising absenteeism. On July 2, 2026, the German coalition committee approved a mandate requiring workers to submit a medical certificate from the first day of illness, replacing the previous rule that allowed a three-day window before a doctor's note was required.
The German government expects to finalise this legislation by the end of 2026. The move follows reports that production losses due to absenteeism reached €134 billion in 2024. To further manage costs, the German Bundestag passed reforms on July 10, 2026, that will introduce a three-tier system for partial incapacity to work starting in 2027. This system will allow doctors to certify employees for 25, 50, or 75 percent of their duties for illnesses lasting longer than four weeks, as part of a broader package aimed at saving approximately €19 billion in 2027.
Equal Pay Reforms and Care Sector Changes
The UK government has also initiated a 15-week consultation, running until October 27, 2026, on comprehensive equal pay reforms. Proposals include the creation of an Equal Pay Regulation and Enforcement Unit and stronger protections for disabled workers and ethnic minorities. Government officials described the existing framework as excessively complex and costly, citing significant liabilities such as a £750 million equal pay obligation at Birmingham City Council.
As the government consults on equal pay reforms, health & safety remains one area where the compliance framework is already well established — yet many businesses still have gaps. Over 37,000 UK companies already use the free Health & Safety Toolkit to protect their employees and meet their legal obligations. It covers fire safety, PPE, first aid, and more with ready-to-use templates. Download the free Health & Safety Toolkit
In other sectors, the government announced the establishment of an Adult Social Care Negotiating Body for England, expected to be in place by the end of 2026. While the first official pay rates under this body are not anticipated until April 2028, the initiative is backed by £500 million in Treasury funding to address pay disparities between care workers and their NHS counterparts.
In the United States, regional authorities are also refining leave policies. The Minnesota Department of Labor and Industry issued final administrative rules for Earned Sick and Safe Time on July 15, 2026. These rules clarify that eligibility is based on a good-faith determination that an employee will work at least 80 hours per year in the state, with rehire reinstatement rights capped at 80 hours for those returning within 180 days.
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