Other employment law reforms outside the Employment Rights Act

The government intends to set out a range of reforms in an Equality (Race and Disability) Bill. The proposed reforms that we expect to be included in that Bill include:

• Extending pay gap reporting obligations for employers with more than 250 staff to cover ethnicity and disability pay gap reporting.
• Extending equal pay rights to protect against pay discrimination on the grounds of race or disability.
• Ensuring that equal pay protections apply when services are outsourced.
• Implementing a regulatory and enforcement unit for equal pay with trade union involvement. It remains to be seen how this new unit would work alongside the Fair Work Agency – read more about the FWA here.

Ethnicity and disability pay gap reporting might be challenging for employers to comply with due to (amongst other factors) lack of available data and reticence from some workers to provide what is sensitive personal information. There is also a risk that results may be skewed due to geographical limitations and small data sets, although this is something that the government sought to address as part of the consultation into its proposal to extend pay gap reporting to ethnicity and disability. That consultation closed in June 2025.

The government’s planned equal pay reforms are also likely to be challenging for employers – existing equal pay legislation is fiendishly complicated even without the added complexity and additional factors that are relevant to discrimination on the grounds of race or disability. We anticipate that the government will launch consultation into how equal pay laws could be adapted to best take account of these complexities.

The government ultimately plans to remove the National Minimum Wage age band that currently applies to 18- to 20-year-olds. Once removed, this will leave a single National Living Wage (NLW) band for all adults.

To reduce the immediate financial impact on employers, the rate for 18- to 20-year-olds is increasing over time to narrow the gap between that and NLW for those aged 21 and over. As a first step, the rate for 18- to 20-year-olds increased to £10.00 from 1 April 2025.

Ahead of the election, the Labour Party had its sights set on creating a single status of worker so that ‘employees’ would be reclassified as ‘workers’ with that broader status being awarded the full suite of employment rights. However, acknowledging that employment status is a complex area of law, the government has instead committed to consulting in detail on how a simpler status framework that differentiates between workers and the genuinely self-employed could properly capture the breadth of employment relationships we have in the UK.

Moving to a single status would have significant employment and tax implications and would represent a major change to the employment law framework. Wherever any revised boundaries between the categories of worker and self-employed might ultimately be drawn, continued litigation on status would seem almost inevitable.

A new code of practice is expected to put guardrails around employer contact with workers outside of working hours. As this reform is now anticipated to be brought forward through a code of practice, and not through a statutory ‘right to switch off’, it is likely to have less impact than was initially thought.

In early March 2025, there were some press reports suggesting that the right to switch off may not progress, but to date, these remain unconfirmed.

If a code is introduced, employers are likely to be able to devise a policy, with their workers, which fits with their own working practices. A breach of the code is not expected to give rise to a standalone claim but may be relevant in other claims.

In July 2025, the Department for Business & Trade launched a call for evidence on unpaid internships. Currently whether an intern has the right to be paid will depend on their employment status, with some interns (e.g. students on a placement as part of their course) not entitled to NMW. These exceptions look set to reduce.

The call for evidence set out several questions looking at the circumstances in which interns are either unpaid or are paid below the National Minimum Wage. It also sought views on the reasons for this and on whether to define the term ‘intern’ in legislation. With these factors in mind, the call for evidence took a broad approach and requested information about unpaid internships, work trials, voluntary work, volunteering and work shadowing. The government plans to respond to the call for evidence in January/February 2026.

In the Next Steps to Make Work Pay paper, the government indicated that it intends to ensure social value is mandatory in contract design, use public procurement to raise standards on employment rights and ensure public bodies carry out a quick and proportionate public interest test.

The National Procurement Policy Statement published in February 2025 provides more information on the social value factors contracting authorities must take into account. The Statement stipulates that authorities should ensure that their suppliers are actively working to tackle (amongst other things) modern slavery and human rights violations and are complying with their tax, employment law and other legal obligations.

In July 2025, the government launched a full review of the parental leave system. The review, which is expected to take 18 months, will look at all types of leave (including maternity, paternity and shared parental leave) to see how the parental leave system can work better for parents and employers.

The launch of the review followed on from a report issued by the Women and Equalities Committee in June 2025, which described the system as ‘broken’ and made several recommendations including increasing statutory paternity leave entitlement from two weeks to six weeks and simplifying and/or removing some of the eligibility rules for shared parental leave.

In April 2024, the previous government brought in a right to a week’s unpaid leave per annum for carers. In Next Steps to Make Work Pay, the current government outlined its plans to review the implementation of unpaid carer’s leave and examine the benefits of introducing paid carer’s leave.

In November 2025, the government published the terms of reference for its review into those points. The review, which is set to be carried out in three phases and conclude by the end of 2026, will assess how the existing unpaid leave entitlement is working, identify whether there are barriers to carers accessing it and examine options for different models of paid carer’s leave whilst being mindful of the impact on employers – particularly small employers. At the end of these three phases, the government intends to issue a report setting out its findings and a roadmap, including next steps for any potential reforms arising out of the report.

The government also intends to extend the Freedom of Information Act (FOIA) to cover private companies holding public contracts (in relation to information relevant to those contracts) and publicly funded employers.

Whilst this proposal is a longer term one, the proposed extension of the FOIA would likely have a significant impact on those in the private sector who would come within its remit for the first time. As with data subject access requests, requests under the FOIA can be time-consuming and costly to comply with.