Employment Rights Act 2025: What it means for the social care sector in Wales

This information note draws upon material published by the UK Government and is designed to help improve understanding of the Employment Rights Act 2025, including key changes to employment law, workforce rights and preparing for upcoming reforms that will impact the social care sector.

The Employment Rights Act 2025, which received Royal Assent on 18 December 2025, includes a number of key measures which will be introduced gradually between 2026 and 2027, giving employers time to prepare and ensuring workers have clear information about their new rights.

You can find more information by reading the  Employment Rights Act 2025 factsheet and the Implementing the Act and roadmap for delivering change.

You can also explore the practical guidance for businesses to prepare for the employment changes, as well helpful links to partners, like Acas, who can offer further support, and can also sign up to receive email updates about the Act.

Fair Pay Agreement for adult social care

The Employment Rights Act 2025 includes powers to establish a Social Care Negotiating Body (SCNB) to agree Fair Pay Agreements (FPAs) for the Social Care Workforce in Wales. The Welsh Government is working to introduce FPAs for social care workers so that this workforce is recognised and rewarded for the important role they play in supporting our most vulnerable people. 

A public consultation on the development of a SCNB for Wales to negotiate FPAs for the social care workforce, including its structure and functions was launched on 24^th February and closes 28 April 2026. The consultation document includes more information on FPA’s.

Statutory Sick Pay 

Statutory Sick Pay (SSP) is the minimum statutory payment an employee is entitled to for periods where they are unable to work due to illness. The key changes to SSP are:

• Eligible employees will now be entitled to SSP from their first full day of sickness absence, rather than the fourth.
• The lower earnings limit has been removed to make SSP available to all employees regardless of their weekly earnings. The changes introduced by the Act mean that the rate of SSP will be whatever is lower between 80% of an employee’s earnings or the current flat rate of SSP.

These changes come into force from April 2026.  

Read more about the changes in the SSP factsheet. There is also helpful guidance as to how different employment types affect SSP eligibility.

Zero‑Hours Contract

The UK Government is committed to ending one-sided flexibility and exploitative Zero-Hours Contracts (ZHC), ensuring that all jobs provide a baseline of security and predictability so workers can better plan their lives and finances. The Act introduces a series of measures to achieve this including:

• right to guaranteed hours
• reasonable notice of shifts
• compensation for cancelled shifts

These changes apply to agency workers too and are expected to commence from 2027, with a consultation expected in 2026.

Read more about the changes in the ZHC factsheet.

Creation of the Fair Work Agency (FWA)

The Fair Work Agency (FWA) will be established as an Executive Agency of the Department for Business and Trade (DBT), created administratively. The FWA will bring together existing state enforcement functions (e.g. HMRC and UK Visas and Immigration (UKVI)) and oversee compliance with minimum wage, holiday pay, and sick pay. Over time, it will also take on enforcement of a wider range of employment rights. The aim is that the FWA will become a single place where workers and employers can turn for help.

The FWA will be established in April 2026, but with no enforcement powers at first.

Read more in the FWA factsheet.

Stronger trade union access and lower recognition thresholds

The UK Government is repealing the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023. This will update existing trade union legislation and reset industrial relations between unions, employers and workers. The repeal of the Trade Union Act 2016 will mean that trade union access rights will be expanded, and recognition thresholds will be lowered. This will likely increase union activity, collective bargaining and workplace negotiations.

Read more about the changes in the trade unions factsheet.

Other measures in the Act 

You can visit the UK Government website for more information on the Employment Rights Act 2025 and factsheets about other measures included within the Act, including Bereavement, paternity and unpaid Parental Leave, Flexible working, and Unfair dismissal.