Employment Compliance Checklist for UK SMEs — April 2026 Ready

The Employment Rights Act 2025 lands in phases starting April 2026. This checklist maps everything that needs doing before Phase 1 hits. Every item is testable — either you’ve done it or you haven’t. Work through systematically. Most SMEs find they need action on 60–80% of these items.

Contracts and Agreements

• Every employment contract has been reviewed against Phase 1 changes (April 2026).
• Probation clauses updated to reflect the statutory probation period framework (details pending in secondary legislation, but contracts need the principle).
• SSP clauses updated to remove references to waiting days or lower earnings limits. SSP language now reflects day-one entitlement.
• Qualifying period language reviewed. Any reference to a two-year unfair dismissal threshold flagged and scheduled for update by January 2027.
• Paternity leave clauses updated to reflect day-one entitlement and flexible arrangements within first year (no longer requires 26 weeks service).
• Non-compliant contracts identified. If you have non-standard, complex, or bespoke contracts, they’re flagged for solicitor review.
• New hires from April 2026 onwards receive updated contracts reflecting the new regime.

Policies and Documentation

• Harassment prevention policy drafted or updated. Covers what constitutes harassment, prevention measures, reporting mechanisms, and support for affected staff.
• Policy explicitly includes responsibility for prevention, not just complaint handling. Policy states the employer’s commitment to “all reasonable steps.”
• Disciplinary procedure policy reviewed and updated. Reflects fair process from day one, emphasises documentation, clarifies procedure for performance management.
• Grievance handling procedure written or updated. Clear, step-by-step process for raising and resolving grievances.
• Sickness absence policy updated to reflect SSP from day one (no waiting days, no lower earnings limit).
• Flexible working policy in place (this is existing law, but often overlooked by SMEs; note it explicitly).
• Holiday entitlement and accrual policy documented.
• Maternity, paternity, and parental leave policies updated to reflect day-one entitlement for paternity.
• Zero-hours or variable-hours contract policy reviewed (if applicable). If you use zero-hours, you have a documented policy on how hours are allocated and what happens if hours are withdrawn.
• All policies compiled into an employee handbook or policy document accessible to all staff.
• Policies dated and versioned so you can track when they were implemented.

Payroll and Systems

• Payroll system reviewed for SSP calculation accuracy.
• SSP payment process updated to apply from day one of sickness absence (no waiting days).
• SSP lower earnings limit removed from payroll rules — all employees get SSP regardless of earnings threshold.
• Payroll provider notified of SSP changes; confirm they’ve updated systems or will do by April 2026.
• Monthly/weekly payroll reports reviewed to ensure SSP is being calculated correctly from day one.
• Statutory deduction calculations verified (PAYE, NI, pension contributions) for accuracy on updated SSP figures.
• Maternity/paternity/parental records updated to reflect day-one paternity entitlement in payroll system.

Manager Training and Awareness

• All managers briefed on day-one rights. They understand new employees have rights from hire date one.
• Managers trained on fair dismissal procedures. They can explain what constitutes a fair reason for dismissal (capability, conduct, redundancy, statutory restriction, some other substantial reason).
• Managers understand documentation discipline. Meeting notes, performance records, discipline decisions need to be written and kept.
• Managers trained on harassment prevention duty. They understand “all reasonable steps” requires active prevention, not just complaint handling.
• Managers briefed on the statutory probation period framework (with caveat that detailed rules are pending). They understand probation is formalised, not abolished.
• Managers trained on the new tribunal time limits (six months from October 2026). They understand exposure lasts longer.
• Managers trained on zero-hours changes (if applicable). They understand guaranteed-hours provisions arriving January 2027 and what the implications are.
• Training documented — dates, attendees, content covered.

Zero-Hours and Variable-Hours Contracts (if applicable)

• Complete list of zero-hours or variable-hours workers compiled.
• For each worker, calculate average hours over past 12 months to identify who will qualify for guaranteed-hours contracts (January 2027).
• Financial impact modelled. What does it cost if 50%, 75%, 100% of current zero-hours workers move to guaranteed-hours contracts?
• Transition plan drafted. How will you move compliant workers to guaranteed-hours contracts while remaining operationally viable?
• Worker communication plan prepared. What will you tell staff about the change and when?

Documentation and Record-Keeping

• Document retention policy written. Specifies how long employment records are kept: minimum 12 months after any employment event, longer for disciplinary/grievance cases.
• Current filing system reviewed. Discipline files, grievance records, performance notes, training records — all organised so you can retrieve them quickly if needed.
• Electronic records system in place. Email archives, shared drives, or document management system for employment records.
• Confidentiality of records assured. Employment records are not mixed into shared folders or accessible to people who shouldn’t see them.
• One-year historical document check done. Any employment events (dismissals, grievances, discipline, significant performance issues) from past 12 months have complete documentation trails.

Harassment and Bullying

• Workplace harassment risk assessment completed. Identifies types of harassment most relevant to your workplace (customer-facing roles, shift patterns, lone working, etc.).
• Reporting mechanisms established and communicated. How can staff report harassment? (Line manager, HR, alternative contact, external helpline if you use one).
• Support for affected staff documented. What happens to someone who’s been harassed? Support available, next steps clear.
• Staff training scheduled or completed. Everyone understands what counts as harassment and how to report.
• Training dates and attendance recorded (for FWA inspection evidence).
• Policy explicitly covers third-party harassment (customers, contractors, etc.). Employer’s responsibility clearly stated.

Recruitment and Hiring

• Recruitment process reviewed to ensure fair, documented hiring procedures.
• Job descriptions updated to reflect current responsibilities (many SMEs use old descriptions).
• Interview process documented. Standard questions, scoring, notes taken.
• Recruitment documentation retained — CVs, shortlisting notes, interview records, offer letters. Kept for at least 12 months.
• Right to work checks documented for all current staff and new hires (pre-April 2026).
• References obtained and filed for all employees (or note on file if references not obtained).

External Support Readiness

• Solicitor identified for employment law advice if needed (contract review, redundancy, complex situations).
• Solicitor contact details on file and someone in the business knows who to call.
• ACAS contact details available (free advisory service for employment issues).
• Fair Work Agency website bookmarked. You know where to find enforcement guidance, inspection checklists, etc.
• Absence management provider or EAP reviewed (if you use one). Confirm they’re aware of SSP changes and will support correctly.
• Payroll provider confirmed as April 2026 ready — SSP changes, day-one changes, paternity changes all accounted for.

Priority Indicators

Critical (do these before April 1, 2026):

• Contracts reviewed and SSP/probation/paternity clauses updated
• Payroll system updated for SSP from day one
• Managers briefed on day-one rights and fair process
• Harassment prevention policy drafted

High (do these by April 15, 2026):

• Zero-hours exposure modelled (if applicable)
• Document retention policy implemented
• All staff given updated contracts or handbook
• Harassment policy communicated to all staff
• Training records started for managers and staff

Medium (do these by May 31, 2026):

• Manager training completed and documented
• Harassment risk assessment completed
• All policies compiled into employee handbook
• Historical employment records audit completed

Going Deeper

If you work through this checklist and find gaps, here’s where to turn:

For contract and policy guidance: Employment Rights Act 2025 and myths guide explain the legal changes. Harassment duties go deep on the October 2026 phase.

For sector-specific issues: If you’re in hospitality, retail, or care, employment compliance for hospitality and retail covers zero-hours, tips, day-one rights, and sector-specific failures.

For the full regulatory timeline: HR Compliance Cascade maps all four phases and shows how they build on each other.

For a full assessment: A professional employment compliance screening (like Bartram HR) audits your current contracts, policies, and practices against all four phases and delivers a prioritised action plan with timelines aligned to each phase. It’s faster than working through everything yourself.