What the Employment Rights Bill means for employers reward and benefits strategies
The Employment Rights Bill, currently progressing through Parliament, represents one of the most comprehensive overhauls of UK employment legislation in recent years.
Aimed at providing greater clarity and consistency, the Bill strengthens protections for employees across a range of areas - including statutory sick pay, maternity and paternity leave, zero-hours contracts, redundancy consultations and more.
The incoming changes and subsequent implementation will drive a shift towards greater transparency, flexibility, and fairness in the workplace.
For HR directors, the Bill’s implications go far beyond legal compliance and will fundamentally reshape how employers think about reward and benefits bringing greater transparency, flexibility and fairness in the workplace.
Traditionally, reward and benefits strategies have been built around attracting and retaining top talent, maintaining competitiveness, and aligning with organisational goals.
In recent years these strategies have evolved further in response to changing employee expectations, particularly in a post-Covid world where wellbeing, mental health, and work-life balance have become more important.
Employers now carry a greater duty of care, and the role of HR has expanded to include initiatives that drive motivation, loyalty and a positive employee experience.
The Employment Rights Bill will now add a new layer of legal expectations on HR leaders and has been the catalyst for strategic re-evaluation, particularly when it comes to areas such as pay transparency, flexible working, worker status, and family-friendly policies.
These will have a more significant impact now for businesses when considering the reward and benefits strategies that will be right for their organisation.
Flexible working
Flexible working is set to shift from a nice to have perk to a statutory right from day one of employment.
Under the Employment Rights Bill, employers will be required to respond to flexible working requests more quickly and with greater transparency.
Employees may seek flexibility for a range of reasons, from childcare and caring responsibilities to managing health conditions or improving work-life balance.
As a result, benefits strategies must evolve to reflect this new reality.
Flexibility can no longer be treated as an exception but embedded as a standard feature of the employee experience.
This requires a rethinking of how roles are designed to accommodate different working patterns, investing in manager training to support flexible teams effectively, and developing clearer career pathways that allow for progression without relying on traditional, linear working models.
A more inclusive and open approach to flexible working not only supports compliance, but also enhances employee wellbeing, broadens access to diverse talent pools, and drives productivity through improved engagement and work-life integration.
Employment status and benefits
The Employment Rights Bill will also bring clearer definitions around employment status, with a proposed three-tier model: employee, worker, and self-employed, with associated rights and benefits clarified for each from the outset.
For many employers, this will mean reviewing how they classify and reward different segments of their workforce, particularly in areas such as holiday pay, pensions and other statutory benefits.
This may involve creating tiered or flexible benefit packages that accommodate different worker statuses while still supporting wellbeing, loyalty and performance.
The Bill introduces a new balancing act for businesses as they navigate the best ways to support different types of workers.
Much of this will come down to offering access to voluntary benefits—such as wellbeing programmes, financial education, or even limited-time access to employee assistance programmes (EAPs) for non-permanent staff.
It’s a positive step forward that encourages a more inclusive and responsible approach for employers to adopt.
Family-friendly policies
New statutory rights for carers, along with expanded parental leave entitlements, will also be introduced under the Bill, promoting a more inclusive approach to employee benefits.
Current proposals include one week of unpaid carer’s leave per year, enhancements to statutory maternity, paternity, and shared parental leave, and stronger protections for pregnant workers and new parents in redundancy situations.
Forward-thinking employers will benefit from going beyond these statutory minimums by offering enhanced leave policies, childcare support, and family health benefits.
As the talent market becomes increasingly values-driven, such policies can help differentiate your business and strengthen employer brand.
HR leaders should review their current benefits offerings and evolve them to better reflect the needs of today’s workforce.
Clear and consistent communication will also be key, ensuring employees are fully aware of what’s available, what they’re entitled to, and encouraging uptake of the benefits and rewards on offer.
Reinforcing company culture
Reward and benefits policies are no longer just ‘nice to haves’ but an essential component of a happy and valued workforce.
Organisations that look beyond the compliance obligations of the Bill have a real opportunity to use their reward strategy to promote a culture of fairness, inclusivity, flexibility, and employee wellbeing.
Those that do this effectively will reap the rewards of improved retention, stronger engagement and greater productivity from a workforce that feels supported.
Next steps
- Conduct a reward audit: Assess where your current reward and recognition policies may fall short under the new legislation and work out which areas need prioritising.
- Access your workforce: When it comes to benefits there is no one-size-fits-all approach and it’s important to offer a variety of initiatives so there is something for everyone. Consider the demographics of your workforce and what each group may need to full fully supported.
- Implement your EAP: Review your options and introduce a programme that works for the business. Keep it flexible and review its effectiveness regularly.
- Educate managers: Line managers will play a pivotal role in promoting the benefit and reward strategies and navigating employee needs. Ensure managers are equipped with the knowledge and training they need to be able to do this effectively.
- Communicate, early and often: Ensure employees understand what is available to them and how to use it. Regularly signpost employees so know how to find the right support and make it accessible for all. The programme is only effective is employees know about it.
The Employment Rights Bill marks a pivotal moment in the evolution of UK workplace law.
For HR directors, it’s not just about staying compliant, it’s an opportunity to future-proof reward and benefits strategies and further encourage a positive workplace culture.
By aligning legal requirements with employee expectations and business objectives, HR leaders can shape a more agile, inclusive, motivated and high-performing workplace for years to come.
Supplied by REBA Associate Member, HCML
HCML is a health and wellbeing provider, offering integrated and personalised healthcare solutions.
