Legislation update: Key legal and compliance changes
Since our last legislation update there is more to keep up-to-date on in the world of UK legislation. We will update you separately in relation to consumer law and data protection as there is too much to include here.
New duty to explain employment rights to sponsored workers
The Home Office has updated the sponsor guidance documents, introducing new duties for sponsors from 6 March 2026 and placing greater emphasis on compliance. These changes apply to all employers who hold, or intend to apply for, a sponsor licence. Read more here.
Other immigration changes
Several significant immigration changes took effect on 5 March 2026. If you hold a sponsor licence, the key changes are below (you can also read more here):
Skilled Worker pay periods: Salary thresholds must now be met in each individual pay period, subject to any variations already permitted under the Immigration Rules. This change is intended to help UKVI monitor and identify underpayments throughout the year.
English language requirements for settlement: The minimum English language requirement for settlement is increasing from B1 to B2. This will apply to applicants across multiple routes, including the Skilled Worker and Global Talent routes. The change comes into force on 26 March 2027.
Global Business Mobility – Secondment Worker route: The required period of qualifying overseas employment is being reduced from 12 months to 6 months.
Right to work for asylum seekers: Asylum seekers who become eligible to work after 12 months will have their work permissions expanded to align with the Skilled Worker route, allowing them to take up roles at RQF Level 6.
Bereaved Partner’s Paternity Leave
New regulations will introduce a new statutory right for employees to take up to 52 weeks of unpaid Bereaved Partner’s Paternity Leave (BPPL) where a child’s primary carer (usually the mother or primary adopter) dies within 52 weeks of the child’s birth or adoption placement. The Regulations apply only to bereavements occurring on or after 6 April 2026. BPPL is a day‑one right with no qualifying service requirement and it must be taken as one single period. Read more here.
Ethnicity and disability pay gap reporting
On 25 March 2026, the government published a response to its consultation on mandatory ethnicity and disability pay gap reporting and confirmed it intends to go ahead with introducing mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees. No timeline for the introduction of reporting has been confirmed at this time. You can read more here.
New minimum wage rates
With effect from 1 April 2026, the national minimum wage (NMW) rates will be increased as follows:
- National living wage (NLW) (21 and over): from £12.21 to £12.71
- 18-20 year old rate: from £10.00 to £10.85
- 16-17 year old rate: from £7.55 to £8.00
- Apprentice rate: from £7.55 to £8.00
New prescribed rates for family-related leave
With effect from 6 April 2026, the prescribed rate for family-related leave will increase from £187.18 to £194.32 per week. This will impact pay for maternity, adoption, paternity, shared parental, parental bereavement and neonatal care leave.
Employer records
From 6 April 2026, all UK employers will be legally required to retain annual leave and holiday pay records for a minimum of 6 years. These records must demonstrate:
- Ordinary and additional annual leave
- Payments on termination, including annual leave carried forward from previous years.
- Details of holiday pay (including what has been included / excluded)
Whilst relevant to employers and HR professionals this is of course also relevant to data protection professionals in terms of retention periods.
Enabling regulations for the Employment Rights Act 2025
The Government has published enabling regulations for some of the provisions of the Employment Rights Act 2025 which are due to come into force in April 2026. The regulations confirm the commencement dates for key employment changes, including from 6 April 2026:
- The maximum protective award for collective redundancies rises to 180 days’ gross pay.
- Sexual harassment will be added as a category for ‘protected disclosures’ under whistleblowing.
- SSP will become payable from day one of sickness absence and the lower earnings limit will be removed. The amount of SSP payable will be the lower of the statutory rate (£123.25 from 6 April 2025) and 80% of the employee’s normal weekly earnings.
Companies House
Companies House has reported a technical ‘glitch’ (not a cyber attack) which allowed registered users of the Companies House WebFiling service to see information relating to other individuals which was not on the public register between 11 October 2025 and 13 March 2026. Once identified this issue was dealt with swiftly, WebFiling was comprehensively tested and re-opened at 9am on Monday 16 March 2026.
Companies House investigated and found that it was technically possible for a logged-in registered user to see certain information not normally published on the public register and to file updates to information without consent (for example, new accounts or changes of director). However, it has confirmed that:
- WebFiling passwords do not need to be re-set.
- No identity verification data (e.g. passport information or personal codes) were accessed.
- No filed documents could have been altered.
- If someone had applied to protect their personal information under the Companies Act 2006, their information was not affected.
- There was no risk of bulk data transfer.
Therefore as a precaution you are advised to:
- Check the information held at Companies House about you is still correct.
- Check no unauthorised filings have been made.
You can do this in WebFiling and on the Find and update company information service. If anything seems incorrect or unexpected you are advised to email Companies House with the subject heading ‘WebFiling issue’ (email address [email protected]).
Finally, if you got a late filing penalty due to the WebFiling service being closed, you can appeal this and Companies House also advise signing up to their free ‘Follow’ service which sends an instant email alert whenever a document is filed with with Companies House for a company you choose to follow.
Big Shift Coming: IPO Plans First Major Fee Hike in Years
Fees payable in relation to trade marks, designs and patents will increase with effect from 1 April 2026. The IPO has published guidance on the new fees, including advice for rights-holders who have fees due around 1 April. You can read more here.
Trade mark co-existence agreements
A recent High Court decision offers a reminder that even long standing co existence agreements need careful monitoring, especially when brands evolve, and product lines expand. C & J Clark International (Clarks) and Trek Bicycle Corporation (TBC) have both used the name TREK for decades. Clarks for its iconic DESERT TREK shoe, and TBC for bicycles and cycling gear. To avoid confusion between their respective markets, the parties entered into a trade mark co existence agreement in 2001, setting clear rules around how each could use the TREK name. Clarks agreed not to use TREK on footwear designed for cycling, sports, or fitness. TBC agreed that TREK could be used on cycling apparel, but not on any footwear. Both parties accepted responsibility for their affiliates and licensees under the agreement.
The benefit of co-existence agreements: Clarity and certainty around brand management and ‘similar’ third party marks, and cost-effective resolution without recourse to litigation.
Where Things Went Wrong: TBC breached the agreement by selling TREK branded cycling shoes and insoles from January 2024 and being responsible for Lidl’s sales of shoes featuring Lidl Trek Team branding. Clarks also breached the agreement by selling TREK branded shoes that were effectively sports/fitness shoes.
Findings: Clarks’ TREK trade marks for footwear remain valid and were not partially revoked for non use. TBC infringed these marks by selling TREK branded cycling footwear and insoles. TBC’s trade mark registrations for TREK and associated logos were held invalid for footwear, given the constraints of the 2001 agreement.
Why This Matters: The importance of monitoring compliance with co existence agreements over time and the need for businesses to ensure licensees and partners remain aligned with brand commitments. This case also shows the importance of considering brand expansion and business plans when signing up to co-existence agreements of this nature. Brands are rarely ‘stuck in time’ which is effectively what a co-existence agreement requires. For IP and commercial teams, it’s a valuable reminder that clarity, documentation, and regular review are essential, especially where well known brands operate in adjacent markets.
Reforms to tackle late payment
The government has announced it will introduce new legislation to tackle late payment with the aim of ensuring small businesses and the self-employed are paid on time. The new legislation will give the UK the strongest legal framework on late payments in the G7 and the government say it is required because late payments cost the UK economy £11 billion each year and that on average 38 businesses shut their doors every day because they are not paid on time.
Following consultation, the government has confirmed the measures it will implement include:
1. New Small Business Commissioner (SBC) powers to: (a) investigate businesses suspected of poor payment practices or inaccurately reporting payment performance; (b) settle payment disputes outside of the court process; and (c) fine businesses, including significant potential fines for large companies that persistently pay their suppliers late or fail to comply with late payment legislation.
2. A requirement for the boards or audit committees of any persistently late-paying large company to publish commentary on why payment performance is poor and what actions they are taking to fix this.
3. Maximum payment terms of 60 days, with strictly limited exemptions, to ensure that smaller businesses are paid in a maximum of 60 days. Exemptions are expected for contracts where both parties are large companies, the purchaser is the smaller party or the goods or services are either being imported or exported.
4. Statutory time limit for raising payment disputes.
5. A requirement that all commercial contracts contain a right to statutory interest at 8% above the Bank of England base rate.
6. A requirement for large companies to report upon interest payments.
However there is no timescale for the introduction of these changes at present, with the government only saying it will introduce new legislation “as soon as Parliamentary time allows”. So watch this space for now!
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Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
