Between April 2026 and the end of 2027, UK employers face the most concentrated wave of employment legislation in a generation. For businesses in frontline sectors, including care, hospitality, retail and manufacturing, the volume of what is coming means the difference between preparing now and scrambling later.
Sona's Director of Payroll Georgina Richards, who marks her 20th tax year in payroll this April, and VP Paul Watson have mapped what is landing and what it means in practice. Here is the picture.
The overarching change to understand is not a single rule. It is the creation of the Fair Work Agency (FWA), a self-funded enforcement body that becomes operational in 2026.
The self-funded model matters.
"They are self-funded, so it's in their interest to actually go and find these examples."
— Paul Watson, VP, Sona
The FWA can investigate businesses proactively, looking back up to six years, without a prior employee complaint. It can also raise employment tribunals on behalf of employees without those employees being notified. Penalties can reach 200% of underpayments, capped at £20,000 per worker, with non-compliant businesses named publicly.
Paul Watson is clear on what this means for record-keeping: businesses that have switched workforce management platforms in the past six years are not off the hook. The FWA's reach extends back regardless, and it is each employer's responsibility to have that historic data available for audit.
For payroll teams, the SSP reforms landing in April 2026 are the most operationally significant change. Three changes arrive together:
The three-day waiting period is removed. SSP applies from day one of absence.
The Lower Earnings Limit of £125 per week is removed. Significantly more employees now qualify.
A new 80% percentage-based calculation replaces the flat rate.
The result is a larger pool of eligible employees, a more complex calculation, and a likely increase in recorded absence. One employer who piloted SSP day one early saw a 20% increase in absence costs over a four to six week period. Georgina Richards advises businesses to model this now: look at how many employees in the last 12 months had fewer than four days of sickness, factor in the new rate, and review the knock-on effect on employer national insurance and pension contributions.
There is also a process issue that is easy to underestimate. Paul Watson flags a common practice that becomes a direct liability under the new rules:
"If an employee calls in sick, they might have that conversation with their manager and say, I can't come in today, but I'll come in for you on Saturday. And rather than that absence being recorded, the shift just gets moved."
— Paul Watson, VP, Sona
Under the old rules, this was bad practice. Under the new rules, with the FWA's six-year lookback, it is an audit risk. Paul's point is that accurate absence recording is now a compliance requirement, not an operational nicety.
On borderline cases, Georgina is direct:
"My advice is: follow the rules of sickness. Pay them the sick pay. You'll get into more trouble not paying SSP than paying it. Then do the investigation with your HR team."
— Georgina Richards, Director of Payroll, Sona
Zero-hours contract reform is the change Paul Watson hears most questions about across Sona's customer base, spanning every sector the business works in.
Employers will be required to track working patterns over a reference period and offer employees a contract reflecting their actual average hours. The obligation applies on a rolling basis, tied to each employee's individual start date rather than a company-wide review cycle. The precise reference period is still being confirmed.
Some employees will not want guaranteed hours, particularly those managing benefit entitlements tied to lower contracted hours. The obligation also appears to extend to agency workers, though the detail of how that works in practice is still being resolved. Paul acknowledges there is still noise around the specifics, but the direction is clear: this is coming, and it will require accurate, connected data to implement correctly.
The immediate action point is shift records. Calculating accurate average hours requires reliable scheduling data. Businesses running on fragmented systems, or recording hours informally, will find this calculation difficult to produce.
Mandatory benefits in kind payrolling has been pushed back from April 2026 to April 2027. HMRC needed more time to resolve technical issues with real-time information submissions for loans and accommodation.
The delay is useful, but the advice is not to wait. Confirm now that your payroll system can handle the BiK categories coming into scope, and if you use a payroll bureau, check that they are registered as a tax adviser ahead of the deadline.
Looking further ahead, the unfair dismissal qualifying period is set to drop from two years to six months, potentially alongside the removal of the compensation cap.
Combined with the FWA's proactive audit powers, this means employment risk starts accumulating from a much earlier point in the employee lifecycle. Loose absence records, unlogged shift swaps, and gaps between what employees are rostered to work and what appears on their payslip are the kind of data gaps that create exposure in an audit or tribunal.
"HR, payroll and scheduling all have to work together on this. Payroll is usually too late."
— Georgina Richards, Director of Payroll, Sona
The businesses in the strongest position are those where compliance is built upstream of the payroll run. Georgina's point is that by the time a problem reaches payroll, the window to fix it has often already closed. The goal is a setup where scheduling and pay data are connected tightly enough that non-compliance cannot make it through undetected.
"It's not a question of if we can handle it. It's just how you approach it: proactive or reactive. There's still some time to be proactive."
— Paul Watson, VP, Sona
The time to audit your payroll processes is now, not when an investigation begins. We are offering a free 30-minute Payroll Health Check with Georgina and the Sona payroll team to help you identify gaps in your current setup and get your questions answered.
Book your 30-minute Payroll Health Check here