On 1st July, the Government released a detailed roadmap for introducing the Employment Rights Bill (ERB). Originally conceived in 2024, the ERB is still moving through Parliament, but this roadmap gives a clearer picture of when and how the new rules will be introduced.
Although the bill hasn’t yet received Royal Assent, the Government has laid out a phased approach to implementation in a policy document titled ‘Implementing the Employment Rights Bill: Roadmap’.
Implementing the bill
Between 2025 and 2027, changes will be introduced gradually. Most key dates fall on either 6th April or 1st October each year. The Fair Work Agency will come into force 6th April 2026. This new regulator will be able to investigate and enforce employment rights such as holiday pay, minimum wage, statutory sick pay, and modern slavery.
Zero-hours contract reform and day-one unfair dismissal rights are delayed until 2027. Reflecting the Government’s aim to communicate with stakeholders and drive effectiveness first. Regulation of umbrella companies is also scheduled for 2027, this is separate from the introduction of joint and several liability which is explained in more detail below, and will come into force via tax legislation, which is due to come in earlier.
Joint and Several Liability (JSL) and what it means
One big change due April 2026 is the introduction of JSL for tax. Meaning if a tax shortfall arises in a supply chain involving an umbrella company, HMRC hold either the umbrella company, agency or end client liable. Once payment is made, the liability is settled. This change is meant to first close the tax gap in the sector before regulating umbrella companies in 2027.
Regulating Umbrella Companies and future plans
In Autumn 2025, we expect a new consultation on how umbrella companies should be regulated. From what we can gather from the governments initial response to the ‘Tackling non-compliance in the umbrella company market’ consultation, the direction seems to be that umbrella companies will likely be brought under existing laws for employment businesses. Suggesting they will fall under the Employment Agencies Act and the Conduct of Employment Agencies and Employment Businesses Regulations.
Once regulation is eventually established there will be a single body placed in charge of enforcing these rules. Eventually, this should come under the Fair Work Agency. But even before specific umbrella regulation kicks in, umbrella companies as employers are likely to fall under the agency’s oversight from April 2026.
How can Recruitment Agencies prepare?
While some reforms are still undecided, Joint and Several Liability is still on track for April 2026. So, it’s wise to prepare early. Here’s what you can do now:
• Review your due diligence processes and internal procedures.
• Map out your full supply chain.
• Tighten your Preferred Supplier List (PSL) to focus on partners you trust.
• Reassess your contractual indemnities, and consider your PSL’s financial stability.
We know legislation is changing fast and we’re here to help make the process as smooth as possible. If you have questions or want support, just reach out to the team here.
Related article: Big changes are coming to the umbrella company market
In March 2025, the Government issued its response to the consultation on “Tackling Non-Compliance in the Umbrella Company Market.” It confirmed plans to adopt Option 3—placing tax responsibility on the employment business that supplies workers to end clients. While this move signals a significant policy shift, it has also introduced new ambiguity. The industry is now left grappling with a critical question: who will be in charge of fulfilling PAYE obligations?