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Compliance

UK employment compliance: a guide for employers

What employers in the UK need to know: written statements, collective agreements, onboarding, working time, payroll, statutory benefits and dismissal.

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UK employment compliance: a guide for employers

The UK gives employers wide contractual freedom: there is no general system of sector-wide pay agreements, and most terms come from the individual employment contract rather than a negotiated settlement. What catches employers out is the pace of change. The National Minimum Wage rose on 1 April 2026, statutory sick pay lost its waiting days and its earnings floor on 6 April, and a lower qualifying period for unfair dismissal is legislated but not yet in force. Every worker, not only employees, is owed a written statement of particulars from day one, with no grace period to catch up later.

Key takeaways

  • Every worker, including casual and zero-hours workers, must receive a written statement of particulars in a single document no later than their first day of work.
  • Most UK employers are not bound by any collective bargaining agreement; a collective agreement only reaches an individual employment contract once it is written in, or once a union wins statutory recognition.
  • The National Minimum Wage from 1 April 2026 is £12.71 an hour for workers 21 and over, £10.85 for 18 to 20 year olds, and £8.00 for under-18s and apprentices.
  • Statutory sick pay has had no waiting days and no lower earnings limit since 6 April 2026; the weekly rate is the lower of £123.25 and 80% of normal weekly earnings.
  • The qualifying period for an unfair dismissal claim is currently two years; a reduction to six months is legislated but not yet in force, with a government-targeted start date of 1 January 2027.
  • The statutory weekly pay figure used for redundancy payments and unfair dismissal awards rises to £751 from 6 April 2026.

What must an employer give a worker on day one in the UK?

Every worker in the UK, not just employees, is owed a written statement of particulars, and the employer must give it no later than the first day of employment. It is a single-document duty: most of the required terms have to be in one document, given on day one, not spread across an offer letter and a staff handbook.

What the statement covers Deadline
The parties, start date, pay, working hours, place of work, job title, holiday and sick pay terms, notice periods, and any probationary period’s conditions and length Single document, no later than the first day
Pensions, any collective agreement affecting the role, and employer-provided training May follow within two months
The disciplinary and grievance procedure note May follow within two months
  • The holiday particular must let the worker work out their own entitlement precisely, including any pay owed for it if they leave. A flat “28 days” clause fails that test for a worker whose leave accrues by percentage rather than a fixed number.
  • The probationary period particular states its conditions and its length, if one applies. There is no statutory default length for probation.
  • The written statement is not the employment contract. A signed employment contract that already contains every particular satisfies the duty, but the two remain legally separate documents.

For more information, see the full written statement requirements.

Does a collective bargaining agreement bind the employer?

Rarely, and only in specific ways. The UK has no system of agreements that automatically apply across a whole sector. A collective agreement between a union and an employer is presumed not to be a legally enforceable contract between them, unless it is in writing and states plainly that both sides intend it to be enforceable.

What usually matters instead is whether the agreement’s terms have found their way into an individual’s employment contract, through an express clause or established custom and practice. Once incorporated, those terms bind the contract like any other, whether or not the employer signed the original agreement.

A trade union can also seek recognition to bargain over pay and conditions. Statutory recognition through the Central Arbitration Committee only applies once the employer, with any associated employers, has at least 21 workers, on the day of the request or on average over the previous 13 weeks.

The written statement of particulars has to name any collective agreement that directly affects a role’s terms, including one the employer never signed, so that document is the first place to check.

For the voluntary route most employers take before a union applies to the Central Arbitration Committee, see the guidance on trade union recognition from Acas, the Advisory, Conciliation and Arbitration Service.

What must an employer do before a new employee’s first day?

Several duties fall due before the first hour is worked, and missing them costs real money. The employer has to check a job applicant’s right to work in the UK before employing them, and getting this wrong can mean a civil penalty of up to £60,000 for each illegal worker.

  1. Right-to-work check. The employer confirms and records the applicant’s right to work before their first day, using the gov.uk right-to-work check service.
  2. PAYE registration. The employer registers with HM Revenue & Customs (HMRC) under Pay As You Earn (PAYE) before the first payday. Registration can be made up to two months in advance, but not earlier.
  3. Employers’ liability insurance. The employer takes out at least £5 million of cover before employing anyone, and displays the certificate. An uninsured employer can be fined £2,500 for every day without cover, and a separate £1,000 for not displaying it.
  4. Pension auto-enrolment. The duty starts the day the first staff member starts work, a date the employer cannot change. Every worker aged 22 up to State Pension age who earns more than £10,000 a year has to be enrolled, and the employer must complete a declaration of compliance within five months of that duties start date.
  5. The written statement. The employer prepares it so it is ready to hand over on day one (see the written statement).

Start the right-to-work check and PAYE registration as soon as an offer is accepted, since both have to be done before work begins.

Which labor laws are specific to the UK?

Two hard limits define pay and hours at the bottom end of the market: the National Minimum Wage (NMW) and the 48-hour working week. The minimum wage rates change every April, and the rates below apply from 1 April 2026.

Age band Hourly rate from 1 April 2026
21 and over (the National Living Wage) £12.71
18 to 20 £10.85
Under 18, and apprentices £8.00

There is no separate rate for 21 and 22 year olds; that band was folded into the 21-and-over rate. An employer providing accommodation may offset up to £11.10 a day against pay, and records proving the rate paid must be kept for six years. Since 7 April 2026, the Fair Work Agency enforces the minimum wage.

Working time rule Figure
Average working week, including overtime 48 hours over 17 weeks (26 for certain excepted workers, up to 52 by agreement)
Night work Average 8 hours in each 24
Daily rest 11 consecutive hours in each 24
Weekly rest 24 hours in each 7 days
Rest break Once a working day passes 6 hours

A signed opt-out removes the 48-hour average only. It does not touch night-work limits, daily rest, weekly rest or rest breaks; only a collective or workforce agreement can vary those.

For more information, see what the 48-hour opt-out disapplies.

How does an employer set up and run payroll in the UK?

Payroll runs on PAYE, the system HMRC uses to collect income tax and National Insurance contributions (NICs) through wages. Registration has to happen before the first payday, and every payday afterward has its own filing.

  1. PAYE registration. The employer registers before the first payday; HMRC will not accept registration more than two months ahead of it.
  2. Reporting every payday. The employer sends a Full Payment Submission (FPS), part of HMRC’s Real Time Information (RTI) reporting system, on or before payday, whatever the actual pay frequency.
  3. Payment. PAYE and employee NICs are due by the 22nd of the following month if paid electronically, or the 19th if paid by post.
  4. Employer NICs. The employer pays secondary Class 1 NICs at 15% above a threshold of £5,000 a year; the Employment Allowance can reduce this bill for eligible employers.
  5. Payslips and year-end forms. Every worker gets an itemised pay statement at or before payday, and anyone employed on 5 April gets a P60 by 31 May.

For the full calendar of filing and payment dates across the tax year, see the UK HR compliance calendar.

Which benefits must an employer provide?

Four benefits are compulsory: annual leave, sick pay, parental pay, and a workplace pension. Two of them, sick pay and holiday pay for variable-hours workers, changed enough in the last two years that older policy wording is often wrong.

Benefit What the employer must do
Annual leave 4 weeks plus 1.6 weeks, capped at 28 days a year; irregular-hours and part-year workers instead accrue 12.07% of hours worked per pay cycle, also capped at 28 days
Holiday pay A week’s pay for each week of leave, including regularly paid commission, overtime and status payments, based on a 52-week cycle
Sick pay From the first qualifying day, the lower of £123.25 a week and 80% of normal weekly earnings, capped at 28 times the applicable weekly rate
Maternity pay Up to 39 weeks: 90% of average weekly earnings for 6 weeks, then the lower of £194.32 and 90% of average weekly earnings for 33 weeks
Paternity pay Up to 2 weeks at the lower of £194.32 and 90% of average weekly earnings; the leave itself is a day-one right, but the pay still needs 26 weeks’ service
Workplace pension Auto-enrolment for eligible workers, with the employer contributing at least 3% and total contributions of at least 8% of qualifying earnings

The 5.6-week figure many employers quote is not written anywhere in the Working Time Regulations 1998. It is the sum of two separate entitlements, capped together at 28 days. For leave years starting on or after 1 April 2024, a worker who meets the irregular-hours or part-year definitions does not get that ordinary entitlement and accrues 12.07% of hours worked instead.

The sick pay reform on 6 April 2026 removed the old three-day wait and the earnings floor that used to shut some low earners out completely. Three separate transitional rules cover an absence that straddled that date.

Statutory Paternity Leave became a day-one entitlement on 6 April 2026, but Statutory Paternity Pay still requires 26 weeks of continuous service by the qualifying week. An employee can be eligible for the leave and not yet for the pay.

Auto-enrolment duties begin the day the first employee starts, a date the employer cannot move, and cover every eligible worker earning over £10,000 a year, according to The Pensions Regulator. An employer can usually reclaim 92% of what it pays out in statutory parental payments from HMRC, or a higher rate if it qualifies as a small employer.

For more information, see statutory sick pay in the UK and how holiday pay is calculated for irregular-hours workers, or run a specific absence through the statutory sick pay calculator.

How does an employer end an employment contract lawfully?

Ending an employment contract lawfully means the right notice of termination, a fair reason, and, once the qualifying period is met, a fair process. Getting the notice period and the qualifying period right comes first, since both are pure arithmetic.

Length of continuous employment Employer’s notice period
1 month to 2 years 1 week
Each complete year after that An extra week, up to 12 years
12 years or more 12 weeks (the cap)

An employee’s own notice to resign is 1 week, once they have 1 month of continuous service, whatever their length of employment after that.

An employee currently needs two years of continuous employment before they can bring an unfair dismissal claim. Legislation passed in 2025 will cut that to six months, but the change is not yet in force. The government’s own timeline targets dismissals from 1 January 2027, though no commencement regulations have been made as of this guide’s last update, so the two-year test still applies today.

A dismissal needs one of five potentially fair reasons: capability or qualifications, conduct, redundancy, a legal restriction that would make continued employment unlawful, or another substantial reason. A tribunal can adjust an award by up to 25%, up or down, for an unreasonable failure to follow the Acas code of practice on discipline and grievances.

Redundancy pay needs two years of service, and it scales with age and length of service, counting at most the last 20 years.

Age during each year of service Redundancy pay per year
41 or over 1.5 weeks’ pay
22 to 40 1 week’s pay
Under 22 Half a week’s pay

The weekly pay figure used for this calculation, and for the basic and additional award in an unfair dismissal claim, is capped at £751 from 6 April 2026.

Dismissing 20 or more employees at one establishment within 90 days triggers collective consultation, and the employer also notifies the Redundancy Payments Service on form HR1.

Proposed redundancies within 90 days Consultation starts at least
20 to 99 30 days before the first dismissal
100 or more 45 days before the first dismissal

Final pay must also include a payment for any statutory annual leave the employee has accrued but not taken.

Before issuing the notice of termination, check the employee’s continuous service against both the two-year unfair dismissal threshold and the redundancy pay threshold, since getting either wrong is the costliest error in a termination.

Frequently asked questions

What must an employer give a new worker on day one in the UK?
Every worker in the UK, not only employees, must receive a written statement of particulars, and the employer has to give it no later than the first day of employment. Most of the required terms belong in a single document: the parties, the start date, pay and pay intervals, working hours, holiday and holiday pay, sick pay, notice periods, job title, place of work, and, where one applies, the probationary period and its length. A narrow set of particulars can follow within two months instead: pension details, any collective agreement affecting the role, training the employer provides, and the note on disciplinary and grievance procedures. The holiday particular has to let the worker calculate their own entitlement precisely, including any pay owed for accrued but untaken leave if employment ends, so a flat number of days is not always enough. The written statement is a separate legal duty from the employment contract itself, even though one document can satisfy both.
Does a collective bargaining agreement bind a UK employer that never signed one?
Rarely, and only through a specific route. A collective agreement between a union and an employer is presumed not to be a legally enforceable contract between them, unless it is written down and states plainly that both sides intend it to be enforceable. What usually binds an individual worker instead is incorporation: the agreement's terms have to be written into the employment contract, either by an express clause or through established custom and practice, before they apply. Once incorporated, those terms bind the contract regardless of whether the employer was ever a party to the original agreement. A trade union can also seek formal recognition to bargain over pay, but the statutory recognition procedure through the Central Arbitration Committee only applies once the employer, together with any associated employers, has at least 21 workers. The written statement of particulars must name any collective agreement directly affecting a role's terms, which is the first place an employer should check whether one applies.
What must an employer complete before a new employee's first day in the UK?
Several duties fall due before work starts. The employer must check that the applicant has the right to work in the UK, since employing someone without one can bring a civil penalty of up to £60,000 for each illegal worker. It must register as an employer with HM Revenue and Customs before the first payday, though not more than two months ahead of it. It must also have employers' liability insurance of at least £5 million in place, since an uninsured employer can be fined £2,500 for every day without cover, and £1,000 for not displaying the certificate. Pension auto-enrolment duties begin on the day the first staff member starts work, a date the employer cannot change, and every eligible worker earning over £10,000 a year has to be enrolled within the following months. The written statement of particulars should already be prepared, ready to hand over on the first day itself.
What is the National Minimum Wage in the UK from April 2026?
From 1 April 2026, the National Minimum Wage is £12.71 an hour for workers aged 21 and over, a rate also known as the National Living Wage. Workers aged 18 to 20 are entitled to £10.85 an hour, and under-18s and apprentices to £8.00 an hour. There is no separate rate for 21 and 22 year olds; that band was folded into the 21-and-over rate. Where an employer provides accommodation, it may offset up to £11.10 a day against the worker's pay before checking whether the minimum rate has been met, and it may not offset a larger amount. Employers must keep records proving the rate actually paid for six years, beginning with the pay cycle that follows the one the records relate to. Getting an age band or the accommodation offset wrong is one of the most common ways employers under-pay the minimum wage without realizing it. Since 7 April 2026, enforcement sits with the Fair Work Agency.
What does a signed 48-hour opt-out actually remove for a UK employee?
It removes one thing only: the average limit of 48 hours a week, calculated over a cycle that is usually 17 weeks. Everything else in the Working Time Regulations 1998 survives an individual opt-out untouched. Workers keep 11 consecutive hours of daily rest in each 24 hours, 24 hours of uninterrupted weekly rest in each 7 days, and a rest break once a working day passes 6 hours. Night workers keep their own separate limit, an average of 8 hours in each 24. Only a collective or workforce agreement, not an individual signature, can modify or exclude those rest and night-work provisions. The cycle itself can also change: it runs 26 weeks instead of 17 for certain excepted activities, such as security work, and a collective or workforce agreement can extend it further, up to 52 weeks. An employer relying on a signed opt-out for anything beyond the 48-hour average is not covered.
What statutory sick pay must an employer pay from 6 April 2026?
From the first qualifying day of sickness absence, an employer pays the lower of two figures: £123.25 a week, or 80% of the employee's normal weekly earnings. The three waiting days that used to apply before payment started were abolished on 6 April 2026, along with the lower earnings limit that previously barred the lowest earners from any entitlement at all. The 80% figure can only pull the rate below £123.25; it never raises anyone above the flat rate, so an employee earning £110 a week gets £88.00, not £123.25. The maximum an employee can draw from one employer is capped at 28 times whichever weekly rate applies to them, which is a cash limit rather than a fixed calendar duration. Three separate transitional rules cover an employee whose sickness absence began before 6 April 2026 and continued afterward, and each covers a different group, so a case straddling that date needs checking against the specific rule rather than the general position above.
How does holiday entitlement work for irregular-hours and part-year workers in the UK?
For leave years beginning on or after 1 April 2024, an irregular-hours or part-year worker does not get the ordinary entitlement of 4 weeks plus 1.6 weeks that other workers receive. Instead, they accrue holiday at 12.07% of the hours actually worked in each pay cycle, capped at 28 days a leave year, and the ordinary entitlement is switched off for them entirely rather than pro-rated. Holiday pay for this group can lawfully be rolled up into ordinary pay as a 12.07% uplift, paid alongside wages rather than when leave is taken, but that method is only lawful for this group; extending it to a regular-hours worker's leave is not authorised. Whether a worker meets the irregular-hours or part-year definitions depends on their actual working pattern, not their job title, so a fixed part-time schedule does not automatically qualify, and a variable-hours arrangement does not automatically qualify either. Each employment contract needs checking against the statutory definitions before 12.07% accrual is applied.
Is the qualifying period for unfair dismissal changing in the UK?
Not yet. An employee currently needs two years of continuous employment, ending with the date their employment ends, before they can bring an ordinary unfair dismissal claim. Legislation passed in 2025 will reduce that qualifying period to six months, and will also remove the statutory cap on the compensatory award, but neither change is in force as of this guide's last update. The government's own published timeline targets dismissals taking place from 1 January 2027 for the new rules, but that is a stated intention rather than a commenced date, and no commencement regulations for the substantive change have been made. Employers should keep applying the two-year test until a commencement regulation says otherwise, and should not treat 1 January 2027 as guaranteed. The weekly pay figure used to calculate compensation, separately from this reform, is capped at £751 from 6 April 2026, and that cap already applies regardless of when the qualifying-period change eventually takes effect.

Sources

Disclaimer

Taito.ai does not provide legal, tax or accounting advice. This article is for general information only. It describes the law as it stood on the date above and is not advice on any specific situation. Rates and thresholds change. Check with a qualified adviser before acting on anything here.

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