Some changes are already in force, more are coming in October 2026 and January 2027, and there is now a new enforcement agency with stronger powers and tougher penalties for getting things wrong.

The good news? You don’t need to do everything at once — but you do need to start preparing.

What has already changed?

From April 2026:

• Statutory Sick Pay (SSP) is now payable from Day One of sickness absence
• The Lower Earnings Limit has been removed, meaning more employees qualify for SSP
• Paternity Leave and unpaid Parental Leave are now Day One rights
• Whistleblowing protection now covers disclosures about sexual harassment
• A new Fair Work Agency is now active, with powers to investigate and issue penalties
• Employers must now keep holiday records for six years

For micro businesses, this means making sure your payroll, policies and records are all up to date. Small admin issues can now become expensive ones.

What’s coming in October 2026?

The next big focus is harassment reform.

From October 2026:

• Employers can be liable for third-party harassment (for example from customers, clients or contractors)
• The duty to prevent sexual harassment becomes stricter, requiring employers to take “all reasonable steps”
• Failure to do so could lead to a 25% uplift in compensation

If you have customer-facing staff, lone workers, or employees working on client sites, this is particularly important.

What’s coming in January 2027?

This is the big one for many small employers:

• The qualifying period for unfair dismissal reduces from 2 years to 6 months
• The cap on unfair dismissal compensation is removed

In practice, this means probation periods, early performance management and documentation will become much more important.

What should micro businesses do now?

You do not need a huge HR project plan — just a few sensible steps:

1) Review your payroll and SSP process

Make sure SSP is being paid correctly from Day One and that any contract or handbook wording is up to date.

2) Tidy up your family leave and whistleblowing policies

Check your documents reflect the new Day One leave rights and the updated whistleblowing protection.

3) Look at harassment risks

Think about whether staff could be exposed to harassment from customers, clients or contractors, and what practical safeguards you have in place.

4) Strengthen probation and performance processes

Consider whether your probation periods are clear, documented and reviewed properly. With dismissal rights moving to 6 months, early action matters.

5) Check your holiday records

Accurate record keeping is now essential, especially with stronger enforcement powers in place.

Final thought

For micro businesses, the key is not to panic — it’s to get the basics right.

Clear contracts, current policies, good records and sensible processes will go a long way in keeping your business compliant and reducing risk.

If you’d like help reviewing your documents or creating a simple action plan for the upcoming changes, AL HR Consulting can support you on a retained or ad-hoc basis.