The UK workplace went through significant changes in 2025. HR teams need to stay ahead of these shifts to remain compliant and support employees well. Here is a summary of the key reforms and what they mean for businesses and workers.

1. A boost to statutory sick pay

More low-paid workers now qualify for statutory sick pay. Previously, workers earning less than £123 per week were not entitled to SSP at all. Under the new rules, around a million more low-paid workers qualify, receiving either 80% of their average weekly earnings or £118.75 per week, whichever is lower.

What this means for businesses:

  • Payroll systems need updating to reflect the change.
  • Review sick pay policies to ensure compliance.
  • Supporting employee health and wellbeing matters more than ever, and flexible sickness policies can help morale and retention.

2. Ethnicity and disability pay gap reporting

Companies with over 250 employees will have to publish ethnicity and disability pay gaps, adding to the gender pay reporting they already do. The government also wants firms to publish action plans for closing these gaps.

What this means for businesses:

  • If you have not already, run internal pay audits now.
  • Transparency matters. Employees and job seekers will be paying attention.
  • Getting ahead of the curve with strong diversity and inclusion practices helps attract talent.

3. Major changes to the benefits system

The government is making significant changes to the benefits system, particularly for disabled workers. The “right to try” scheme lets people attempt employment without losing their benefits. From 2028, work capability assessments will be replaced with personal independence payment assessments.

What this means for businesses:

  • More disabled job applicants may enter the workforce.
  • Review workplace accessibility and support systems.
  • Businesses that embrace these changes gain access to a broader talent pool.

4. The employment tribunal backlog

Employment tribunals have seen a 31% rise in cases. Legal experts are concerned that new employment rights may be difficult to enforce because of delays.

What this means for businesses:

  • Proactive dispute resolution matters. Settling issues internally saves time and legal cost.
  • Clear and fair policies on redundancy, contracts and grievances help prevent tribunal cases.
  • A well-trained HR team can spot and resolve potential disputes before they escalate.

2025 was a significant year for UK workplaces. These changes bring challenges, and they also create opportunities to build fairer, more supportive environments. Our HR technology guidance covers practical systems implications in detail, and you can talk through the pressure points with us.