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From 6 April 2026 employers will face a number of changes to statutory payment rates and employment law compensation limits. These changes, which are the result of both annual rate adjustments and wider reforms under the Employment Rights Act 2025, will increase employer costs, expand eligibility for workers, and require updates to payroll processes, policies and budgeting.
Natalie Abbott, Partner and Head of Employment Law, gives an overview of what's changing, and what employers need to be thinking about now.
Statutory Sick Pay (SSP): higher rates and "day one" entitlement
A big shift is coming for SSP. From 6 April 2026:
- SSP rises to £123.25 per week (up from £118.75)
- Employees will be entitled to SSP from day one of sickness (the 3-day waiting period disappears)
- The Lower Earnings Limit is removed, extending eligibility to lower-paid workers
- Payment is set at the lower of £123.25 or 80% of normal weekly earnings
What this means for employers:
Expect more employees to qualify for SSP and to qualify sooner. Payroll teams will need to update systems, and employers may see an increase in sickness-related costs.
Statutory family leave payments: a new weekly rate
From 6 April 2026, the prescribed weekly rate for:
- Statutory maternity pay (after the first 6 weeks)
- Statutory paternity pay
- Statutory adoption pay
- Statutory shared parental pay
- Statutory parental bereavement pay
- Statutory neonatal care pay
will all increase to £194.32 per week (up from £187.18).
The Lower Earnings Limit for these payments also rises to £129 per week.
Employer takeaway:
Double-check payroll systems and eligibility assessments, particularly for employees who sit close to the current Lower Earnings Limit.
National Minimum Wage: new rates from 1 April 2026
Although these changes take effect slightly earlier, they're typically part of April payroll updates, so employers often review them at the same time.
The new minimum wage rates from 1 April 2026 will be:
- Age 21+ (National Living Wage): £12.71 per hour
- Age 18–20: £10.85 per hour
- Age 16–17 and apprentices: £8.00 per hour
What to do now:
Make sure any affected employees are paid at least the new statutory minimum rates from the first pay reference period after 1 April.
Collective redundancy: protective award doubles
From 6 April 2026, the maximum protective award for failing to properly consult in a collective redundancy rises from 90 days' pay to 180 days' pay.
Why it matters:
This significantly increases financial exposure if consultation requirements aren't followed carefully.
Limit on a week's pay
The statutory limit on a week's pay, used for calculations like statutory redundancy pay and the basic award for unfair dismissal, will increase from £719 to £751.
Tribunal compensation: a higher cap (for now)
The cap on the compensatory award for unfair dismissal increases to £123,543 (up from £118,223).
This annual uplift is expected to be the last one, because under the Employment Rights Act 2025 the statutory cap is due to be removed entirely from 1 January 2027.
The updates to SSP and family leave form just part of the wider reforms set out in the Employment Rights Act 2025. More changes will continue rolling out throughout 2026 and beyond.
For a deeper look at what's coming, especially the reforms taking effect from 6 April 2026, read full guide to the Employment Rights Act 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
