Against the backdrop of significant pressures on the adult social care sector, two major regulatory developments are reshaping how businesses recruit, manage and retain staff: the ongoing implementation of the Employment Rights Act and the Home Office's increasingly stringent compliance requirements. Care operators must act now to review their employment practices, workforce planning and compliance procedures.

Employment Rights Act: A New Era for Employers

The Employment Rights Act 2025, which became law in December 2025, represents one of the most significant overhauls of UK employment law in a generation. The reforms are being phased in throughout 2026 and 2027. For care providers, where rising costs, high staff turnover, shift working and recruitment challenges are the norm, several changes are particularly noteworthy.

Day-One Employment Rights

A key theme of the reforms is the extension of employment protections from the first day of employment rather than after qualifying periods. Day-one rights now apply to paternity leave and unpaid parental leave and from 1 January 2027 employees will need to have been continuously employed for 6 months, not 2 years, before they can claim ordinary unfair dismissal.

Care providers should ensure employment contracts, handbooks and HR procedures accurately reflect these new entitlements. Probationary periods must be kept under close review and staff proactively managed to deal with performance and conduct issues before unfair dismissal rights are obtained.

Statutory Sick Pay

Changes introduced in April 2026 removed the Lower Earnings Limit for Statutory Sick Pay and abolished the three-day waiting period. More workers are now eligible for sick pay and can access it sooner. Reviewing absence management triggers, employee reporting practices and payroll processes is recommended.

Employment Tribunal Time Limits

On 1 October 2026, employees expect to be given longer to bring a Tribunal claim with the time limit being extended for most claims from 3 to 6 months.  Accordingly, gathering evidence early and strong record keeping practices will be crucial.

Harassment Reforms

On 6 April 2026, the whistleblowing regime was amended give protection to disclosures relating to sexual harassment.  From 30 October 2026, employers must take 'all reasonable steps' to prevent sexual harassment.  Exactly what constitutes reasonable steps will be explained in Regulations in 2027.  Employers will also be under a duty to take reasonable steps to prevent harassment by third parties e.g. service users, contractors, visitors.  To comply with this duty managers and employees will need to be trained, risk assessments reviewed and reporting mechanisms established as a minimum (further information can be found here).

Zero Hours, Low Hours and Agency Workers

For these workers, 3 new rights are to be introduced in 2027:

• Guaranteed hours
• Reasonable notice of shifts
• Compensation for cancelled, moved or curtailed shifts

The detail is awaited following the closure of government consultation in August 2026 but businesses should review rostering and scheduling practices now to understand the potential impact of these new protections.  Failure to comply will entitle workers to claim compensation and pursue a claim.

Immigration Changes: Compliance Clampdown

For many, overseas workers remain a critical part of the workforce. However, all are facing increased scrutiny from the Home Office with continued high numbers of sponsor licence revocations.

April 2026 changes to the way the Home Office assesses compliance with salary rules are requiring employers to respond to detailed information requests within short timeframes.  A failure to pay the correct wage or notify reportable absences or changes in salary is viewed as a material non-compliance with sponsor duties resulting in licence suspension or revocation, preventing new workers being sponsored and placing existing sponsored staff at risk. Regular internal audits of compliance systems are increasingly important as enforcement activity continues across the sector.

A major expansion of the UK's right to work regime will take effect on 1 October 2026. Traditionally, employers have been responsible for checking the immigration status of employees. Under the new rules, obligations will extend to a wider range of working arrangements, including certain contractors, subcontractors, agency workers and labour supply chain arrangements. Liability may also extend beyond the direct employer in some circumstances.

For care home businesses, this means greater scrutiny of agency staffing arrangements and outsourced labour providers. Additional contractual protections need to be included in commercial contracts and onboarding procedures will need to be strengthened. Non-compliance can lead to civil penalties of up to £60,000 per illegal worker, sponsor licence action, reputational damage and business disruption.  Further information can be found here and here. 

Ward Hadaway has significant experience advising care providers on their full journey from sourcing initial funding, business acquisition, structure, commercial contracts, employment, safeguarding and regulatory compliance, obtaining further funding for expansion, additional property acquisitions and eventual business sale – visit us at stand M31 for more information.