Business Energy & Net-Zero Update — New Support and Planning Triggers

What Employers Must Prepare For Now

Several employment law updates are scheduled or expected for 2026 following government consultations, ACAS guidance updates, and upcoming legislative changes. Employers should begin planning now to avoid compliance issues and unexpected HR costs.

Here are the key areas expected to impact UK businesses:

1. Strengthened Flexible Working Requests
   Following changes implemented in April 2024, further updates are expected in 2026 including:
   • Faster decision times for employers
   • Expanded employee eligibility
   • More detailed requirements for explaining refusals
     
     With hybrid work now the norm, employers need updated internal policies.
     
     
2. New Predictable Working Pattern Rights
   These rights — enabling workers on unpredictable or zero-hour contracts to request more stable hours — are being refined for 2026. Employers will need to:
   • Update employment contracts
   • Implement request-handling procedures
   • Document business justification for refusals
     
     Sectors affected: hospitality, retail, care, logistics.
     
     
3. Expanded Harassment Prevention Duties for Employers
   Following consultation with the Equality & Human Rights Commission (EHRC), employers will see:
   • Clearer obligations to prevent third-party harassment
   • Stronger duty to provide training, reporting channels, and proactive prevention steps
   • Potential financial penalties for non-compliance
     
     This will require policy updates and refreshed staff training.
     
     
4. Changes to Holiday Pay and Rolled-Up Holiday
   Small firms still struggle with correct holiday pay calculation, especially for variable-hours workers. Updated guidance and enforcement in 2026 will focus on:
   • Rolled-up holiday pay legality
   • Accurate percentage calculations
   • Improved payslip transparency
     
     Businesses should review payroll systems and calculations.
     
     
5. Strengthened Enforcement of Minimum Wage Compliance
   With continued wage growth and higher staffing costs, 2026 will see:
   • More HMRC spot audits
   • Larger penalties for underpayment
   • Greater scrutiny of deductions, time-tracking, and accommodation offsets
     
     SMEs must tighten payroll controls to avoid penalties.
     
     

What Employers Should Do Now

1. Audit contracts and policies for flexibility, working patterns and harassment prevention.
2. Train managers on new obligations and request-handling procedures.
3. Review payroll compliance with minimum wage and holiday pay rules.
4. Document all working-pattern and flexible-working decisions.
5. Prepare for increased HR administration — especially in shift-based industries.
   
   

How We Can Help

• Payroll audits to ensure compliance
• HR policy updates in partnership with ACAS guidance
• Cost forecasting for wage rises and staffing changes
• Advisory support for workforce budgeting and contract strategy

2026 will bring one of the biggest shifts in employee rights since 2020 — and employers who prepare early will avoid risk and disruption. Feel free to contact us to arrange a call to see how we can assist you.