If you’re a small business with employees or contractors, you need to be aware of the rules, regulations and laws relating to their relationship with you. Below are a selection of key UK employment laws to be aware of. You should be aware too that there are specific employment and HR laws and regulations depending on your industry (e.g. construction, hospitality, education).
If you’re looking for more guides, be sure to check our beginners guide to payroll and beginners guide to business insurance.
Employment Rights Act 1996 and Equality Act 2010
UK employment law builds on several foundational statutes. The Employment Rights Act 1996 (ERA) shapes the basic relationship between employers and their staff – everything from written employment terms to protection against unfair dismissal. The Equality Act 2010 builds on this foundation by outlawing workplace discrimination across nine protected characteristics. You’ll need to know both backward and forward as a small business owner.
These laws don’t exist in isolation. Courts interpret and apply them through case law, creating a living body of precedent that shapes how we understand employment rights. The system evolves constantly – take the Worker Protection Act that came into force in late 2024, requiring employers to actively prevent sexual harassment rather than just react to incidents.
Working Time Regulations 1998: hours, rest periods and working patterns
The Working Time Regulations tell us exactly what we can and can’t ask of employees. No one should work more than 48 hours weekly without signing an opt-out agreement. Night workers face tighter restrictions, averaging no more than eight hours per 24-hour period. Your team needs proper breaks too: 11 consecutive hours daily, one full day weekly, and 20 minutes during longer shifts.
Young workers get extra protection – no night work between 10 PM and 6 AM, for instance. But don’t fall into the trap of treating all staff the same way. Different roles might need different approaches within these legal boundaries. A delivery driver’s rest breaks will look very different from an office worker’s, but both need their legal minimums.
National Minimum Wage Act 1998 and Employment Rights Act
The National Living Wage sits at £11.44 per hour for workers 21 and over. Workers aged 18-20 receive £8.60, while those under 18 but over school age get £6.40. These rates matter – underpaying even by accident can trigger investigations and penalties.
You can’t make deductions from wages unless: your employment contract specifically allows it, you have written consent, or it’s for things like tax and National Insurance. Even then, you need clear records showing what you’ve deducted and why. Tips? Those belong to your workers now – the law banned employer tip retention in 2024.
Employment Rights Act Section 1: written particulars and contract requirements
Every single employee needs a written statement of terms from day one. This document lays out the basics: who’s employing whom, when they start, what they’ll do, where they’ll work, what you’ll pay them, and when they can take holidays. But don’t confuse this with the full employment contract – think of the statement as the minimum legal requirement, while the contract can include additional terms that benefit both sides.
Employment Act 2002 & Working Time (Amendment) Regulations 2024: flexible working rights
The law transformed flexible working from perk to right in 2024. Employees can now make two flexible working requests yearly without explaining how it might affect the workplace. This covers everything from adjusted hours to remote work. You’ll need valid business reasons to refuse these requests – “we’ve always done it this way” won’t cut it anymore.
Pregnant workers gained stronger protections too. Redundancy protection now stretches from pregnancy disclosure through to 18 months after birth. This matches the protection level previously reserved for those on maternity leave.
Health & Safety at Work Act 1974: workplace safety requirements
Business owners need to grasp the Health & Safety at Work Act’s fundamental principle: you bear primary responsibility for workplace safety. This stretches beyond just avoiding accidents – you need a comprehensive health and safety policy, regular risk assessments, and proper training for all staff. The law expects you to provide adequate facilities, maintain equipment, and ensure safe working practices. Make no mistake, this applies even if you run a small office – the risks might differ from a factory floor, but they still exist.
Trade Union and Labour Relations (Consolidation) Act 1992: employee representation rights
Even small businesses need to understand trade union rights. Your employees can join unions, engage in collective bargaining, and participate in industrial action. You can’t discriminate against workers for union membership or activities. The law protects their right to discuss workplace issues collectively. Modern union relationships often focus on constructive dialogue – many small businesses find unions help them spot and solve problems early.
Employment Status Under ERA 1996 & IR35 Regulations: contractor vs employee classification
Getting employment status wrong can cost you dearly. The law recognizes clear differences between employees and contractors. Employees work under your control, typically exclusively for you, receiving statutory rights like minimum wage and holiday pay. Contractors maintain independence, working under a contract for services. But here’s the tricky part – calling someone a contractor doesn’t make it so. Courts look at the reality of working relationships, considering control levels, integration into your business, and who bears financial risk.
Data Protection Act 2018 & UK GDPR: employee data management
Managing employee data brings serious responsibilities. You must process personal information fairly and lawfully, telling staff exactly how you’ll use their data. Keep it secure, don’t hold it longer than necessary, and respect subject access requests. Employee monitoring? Tread carefully – you need clear policies and genuine business reasons. Remote working has complicated this further – make sure your data protection measures extend to home offices.
Equality Act 2010: protected characteristics and discrimination prevention
The Equality Act demands more than just avoiding obvious discrimination. You need to actively prevent discrimination across nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. This affects everything from hiring to promotion, training to termination. Consider reasonable adjustments for disabled workers, and watch out for indirect discrimination – policies that seem neutral but disadvantage particular groups.
Worker Protection Act 2024: sexual harassment prevention
The law now requires proactive steps to prevent sexual harassment. You can’t just wait for complaints – you need clear policies, regular training, and active measures to create a respectful workplace culture. Document your prevention efforts – if harassment occurs despite them, you’ll need to prove you took reasonable preventive steps.
Employment Rights Act: performance management and capability procedures
Managing performance requires careful documentation and fair processes. Start with clear job descriptions and performance standards. Regular appraisals should track progress and concerns. When problems arise, follow a structured improvement process – verbal warnings, written warnings, and ultimately dismissal if necessary. But remember – capability differs from conduct. If someone can’t do their job despite trying, they need support and training before any disciplinary action.
Maternity and parental rights under Employment Rights Act 1996 & Work and Families Act 2006
New parents have robust legal protections. Pregnant employees need time off for antenatal care, with full pay during appointments. Maternity leave stretches up to 52 weeks, with the first six weeks paid at 90% of average earnings, then statutory maternity pay for 33 weeks. The 2024 amendments expanded redundancy protection – it now runs from when an employee discloses pregnancy until 18 months after birth.
Fathers and partners get their share too. They can take two weeks of paternity leave, plus shared parental leave if they want to split childcare with their partner. The introduction of neonatal care leave in 2024 added extra support for parents whose babies need hospital care after birth.
Statutory carers’ rights under Work and Families Act & Employment Rights Act
Caring responsibilities gained stronger recognition in 2024. The law now gives employees day-one rights to take statutory carer’s leave – up to one week of unpaid leave annually to care for dependents with long-term needs. This sits alongside existing emergency dependents leave for sudden crises. You’ll need clear processes to handle these requests fairly.
Working Time (Predictable Terms and Conditions) Act 2024: scheduling rights
Zero-hour contracts and variable schedules faced major changes. Workers can now request more predictable working patterns, and you’ll need solid business reasons to refuse. This affects everyone from casual staff to those on fixed-term contracts under a year. Think carefully about work patterns – could you offer more stability without harming your business?
National Minimum Wage (Amendment) Regulations: tips and service charges
The rules around tips changed dramatically. You can’t keep any portion of tips or service charges – they belong entirely to your workers. You need a written policy explaining how you distribute tips fairly. Cash tips go straight to workers, while card tips and service charges need clear allocation systems.
Employment Rights Act: holiday pay and leave entitlement
Holiday calculations got clearer for irregular workers. From April 2024, you can use the 12.07% accrual method for rolled-up holiday pay. Regular workers still get 5.6 weeks paid annual leave minimum. Watch those bank holidays – they count toward the minimum if you require employees to take them as leave.
This pulled everything into clearer focus around time off. When someone works varying hours, you can now calculate their holiday pay based on an average of what they earned in the previous 52 weeks. Makes life easier than the old system, where you had to puzzle through complex calculations for occasional overtime.
ACAS Code of Practice: discipline and grievance procedures
The ACAS Code sets out clear steps for handling workplace problems. You’ll need written procedures for both discipline and grievances, and you should follow them consistently. Start with informal conversations where possible – sometimes a quick chat resolves issues before they escalate. When things get formal, invite employees to meetings in writing, giving them time to prepare and the right to bring a companion.
Document everything. Keep detailed notes of meetings, send follow-up letters confirming what you discussed and decided. If you end up at a tribunal, they’ll want to see you followed fair procedures. They can increase compensation by up to 25% if you didn’t follow the ACAS Code.
Transfer of Undertakings (Protection of Employment) Regulations 2006: TUPE rights
TUPE protects employees when a business changes hands or service contracts transfer. The new employer takes on all existing employment contracts, including length of service and terms and conditions. You can’t just change these terms because of the transfer – you need a solid business reason unrelated to the transfer itself.
Let’s talk about information and consultation. You must tell affected employees about the transfer, when it’s happening, and how it affects them. Get this wrong and you could face expensive claims. Smart employers start planning their TUPE compliance early – it’s not something you want to figure out at the last minute.
Pensions Act 2008: auto-enrolment/workplace pension requirements
Auto-enrolment changed the pensions game completely. Every employer must enroll eligible workers into a pension scheme and make minimum contributions. The rules kick in as soon as you hire your first employee who meets the age and earnings criteria. You can’t encourage workers to opt out – that’s against the law.
The minimum contribution rates stand at 8% of qualifying earnings, with employers paying at least 3%. Some employers choose to pay more to attract and keep good staff. You’ll need to keep records showing you’ve met your duties and re-enrol eligible workers every three years.
Health and Safety (Display Screen Equipment) Regulations 1992
Modern work means screens, lots of them. These regulations demand you assess workstations, provide proper equipment, and give workers breaks from screen work. Remote work hasn’t changed these obligations – you’re still responsible for home workstations.
Monitor usage patterns, encourage regular breaks, and respond promptly to any health concerns. Eye tests? If employees use display screens regularly, you’ll need to pay for them. Same goes for basic spectacles if they’re needed specifically for screen work.
Equality Act 2010: equality and diversity
You need solid equality and diversity policies – they protect both you and your staff. Write them in plain English and make them practical. Tell people exactly what behaviours you expect and what counts as discrimination or harassment. Then back it up with regular training. Make sure managers know how to spot problems early and handle them properly.
Think about recruitment too. Your job ads should focus on skills and experience, not personal characteristics. Watch out for unconscious bias in interviews. Some companies use blind recruitment – removing names and other identifying details from applications before shortlisting. It helps you focus on what really matters: can this person do the job?
Modern Slavery Act 2015: supply chain due diligence
Even small businesses need to think about modern slavery, especially if you’re part of larger supply chains. Big companies will ask about your anti-slavery measures. You’ll want to check your own suppliers too – could any of them be using forced labor? Document your checks and keep policies updated.
Take a look at your recruitment processes. Using agencies? Make sure they’re reputable and check their practices. Keep clear records of right-to-work checks. If something doesn’t feel right, investigate. Better to ask awkward questions than risk involvement in exploitation.
Public Interest Disclosure Act 1998: whistleblowing protection
Your staff need to know they can raise serious concerns safely. Create clear whistleblowing procedures – who should they talk to? What happens next? Protect whistleblowers from retaliation. Keep their identity confidential where possible.
Good whistleblowing policies encourage people to speak up early, before problems get serious. Make sure senior staff take concerns seriously and investigate properly. Document everything – you might need to prove you handled things fairly.
Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002
Fixed-term staff deserve equal treatment with permanent employees. Give them the same access to benefits, training, and promotion opportunities. After four years of continuous fixed-term contracts, they automatically become permanent unless you’ve got a really good reason why not.
Keep track of contract renewals. Tell fixed-term staff about permanent vacancies. If you’re not renewing someone’s contract, give them proper notice and a written explanation. Treat ending fixed-term contracts like any other dismissal – follow fair procedures.
Management of Health and Safety at Work Regulations 1999
You need to spot workplace dangers before they cause harm. Walk around your workplace regularly – look for obvious hazards like trailing cables or blocked fire exits. Talk to your staff – they often notice problems you might miss. Think about less obvious risks too, like stress or repetitive strain injuries.
Write down what you find and what you’ll do about it. Make these records clear and practical. When something changes – new equipment, new processes, new premises – check if you need to update your assessments. Remember, risk assessment isn’t a one-time thing. Keep checking your safety measures work.
Information and Consultation of Employees Regulations 2004
Your staff have the right to know about changes that affect them. Changes to contracts, restructures, new working methods – tell people early and give them chance to respond. Sometimes you’ll need formal consultation processes. But even when you don’t, keeping people informed helps avoid misunderstandings and builds trust.
Set up good communication channels. Regular team meetings, one-to-ones, staff newsletters – use whatever works for your business. Just make sure information flows both ways. Listen to what your staff tell you – they often have great ideas for improving things.
Computer Misuse Act 1990 & Investigatory Powers Act 2016
Technology brings new workplace challenges. Create clear IT policies – what can staff use work computers for? Can they send personal emails? What websites can they visit? Tell people if you monitor their computer use. Make sure they understand data security – strong passwords, encrypted files, careful email use.
Social media needs special attention. Set boundaries around what staff can say about work online. Help them understand how careless posts could harm the business – or their careers. But remember, you can’t control everything they do online. Focus on protecting confidential information and maintaining professional standards.
Agency Workers Regulations 2010
Treat your agency workers fairly. After 12 weeks, they get the same basic working conditions as your permanent staff – pay, hours, breaks, holiday. Keep track of how long they’ve worked for you – that 12-week qualifying period can include breaks, so check the rules carefully.
Tell your permanent staff about agency vacancies. Give agency workers access to your facilities – canteen, car parking, childcare if you provide it. You don’t have to give them all company benefits, but their basic working conditions should match your permanent staff.
Health and Safety (Home Work Places) Regulations 2023: managing remote workers
Remote work brings the workplace into people’s homes. You need a way to check home workstations meet health and safety standards. Send your staff a self-assessment checklist. Get them to photograph their setup. Make sure they have proper chairs, adequate lighting, and enough space to work safely.
The display screen equipment rules still apply. Your staff need proper breaks from screen work. Help them set up their equipment correctly. Pay for eye tests if they need them. Think about mental health too – working alone can be isolating. Set up regular check-ins and encourage people to stay connected with colleagues.
Workplace investigations under ACAS Guidelines
When something goes wrong, you’ll need to investigate. Get your facts straight before making any decisions. Talk to everyone involved. Gather evidence – emails, documents, CCTV if you have it. Keep notes of every conversation. Stay neutral – don’t jump to conclusions before you’ve heard all sides.
Give people a fair chance to explain. Let them bring someone to support them in meetings. Keep things confidential – office gossip can make situations much worse. Move quickly but thoroughly. Long investigations stress everyone out.
Environment Bill 2023: workplace environmental standards
Climate change affects how we work. You’ll need policies about energy use, waste reduction, recycling. Think about your carbon footprint – can you cut down on business travel? Use less paper? Switch to energy-efficient equipment?
Help your staff understand why environmental measures matter. Make it easy for them to do the right thing. Put recycling bins where people need them. Set up good video conferencing so they don’t need to travel so much. Small changes add up.