TECHNICAL | 19
THEME
ROYAL ASSENT
APRIL 2026
OCTOBER 2026
2027 TBC
Strengthening trade unions’ right of access and duty on employers to inform workers of their right to join a trade union.
Simplifying industrial action and other trade union rules.
Simplifying the trade union recognition process and e-ballots.
Trade union reform
Industrial relations framework.
Flexible working. Pregnant workers’ rights. Gender pay gap and menopause action plans.
Day one paternity leave and unpaid parental leave.
Family friendly
Enforcement
The FWA body established
Changes to Employment Tribunal time limits.
Collective redundancy protective award – doubling the maximum period of the protective award. SSP changes. Whistleblowing protections
Collective redundancy – collective consultation threshold. Ending the exploitative use of zero-hours contracts. Unfair dismissal – six-month qualifying period
Other
Changes to ‘fire and rehire’.
Implications for payroll 1. Payroll data is essential for compliance with this Directive and will serve both reporting and broader pay equity and UK equal pay analysis needs. 2. Global pay reporting will be particularly challenging, especially since final pay definitions may include salary, incentives, equity, benefits and pensions from various sources. 3. Pay data needs to be accurate, as it will need to be accessible to employees upon request. 4. Investment in automation within pay systems will be crucial to reduce manual workload in the future and help proactively manage equal pay risk. Practical approaches to managing change and the associated risks Given the scale, timing, uncertainties and interdependencies of regulatory change, a holistic approach to change and risk management is necessary. 1. Adopt a holistic and programme-led approach to regulatory change. This will allow teams to work together, manage interdependencies and avoid the duplication of effort which can result from disconnected projects for each regulatory change. 2. Work closely with HR and legal teams to clarify legislative requirements and implementation timelines, and conduct a comprehensive impact assessment of regulatory changes. This should focus on: l reviewing employment contracts, sick pay policies, leave entitlements and pay structures for compliance needs by employee group l assessing the readiness of processes, systems, data and governance (such as payroll and HR software), to manage new calculations and reporting l enhancing data management for improved collection and analysis to meet strict reporting standards within the required deadlines. 3. Get on the front foot with communication. Inform employees about their new rights
compensating cancelled shifts, affecting payroll. 4. There’ll need to be enhanced tracking of day-one leave entitlements. 5. Systems will need to be strengthened for monitoring variable-hours workers’ schedules and managing leave requests. Pay transparency and pay equity, the EU Pay Transparency Directive and beyond For those with operations in the in the EU, the EU Pay Transparency Directive will likely have significant Implications. This Directive is a ground-breaking initiative to ensure equal pay for equal work, by setting minimum standards for pay transparency and strengthening enforcement from June 2026. This Directive will affect employers in the EU or those who compete for talent in EU jurisdictions. While the wider strategic implications of this Directive are considerable, the operational challenges and risks of compliance are also significant. Even more challenging is the slow local country transposition of the Directive, as this means that organisations are working to prepare for reporting without the full picture of specific requirements. While this Directive will only impact those operating in the EU, a wider focus on pay transparency and pay equity can be seen globally and in the UK. Anticipated changes in the UK will, in time, extend existing pay gap reporting and equal pay requirements to include ethnicity and disability as well as gender. Ahead of these changes, equal pay remains a growing area of focus and risk for UK employers, with ongoing legal cases demonstrating the scope of challenge in this area and the implications and potential costs of getting it wrong. As a result, more and more organisations are proactively monitoring equal pay risk through regular legal reviews and updates to pay governance processes to ensure that pay decisions, both during pay round and off-cycle, are aligned to broader reward philosophy and structures and don’t generate equal pay risk.
and how pay and benefits are determined, to foster trust and pre-empt potential queries or disputes. Effective communication will require a detailed understanding of how different groups of employees are going to be impacted and when this will happen. 4. Invest in data – across all of these regulatory changes, payroll data sits at the centre. As reporting and transparency requirements increase, many organisations are finding that one-off reports and manual fixes are no longer enough. Payroll data needs to be accurate, easy to access and reusable, so issues can be spotted earlier rather than after they become problems. How organisations manage and use payroll data is increasingly what determines whether they stay ahead of regulatory change or are forced to react to it. 5. Keep monitoring legislative updates and Government guidance, as many details remain under review. With more than around 8,000 workforce people in over 90 countries, we’re able to combine global payroll services with a combination of industry, business, strategy, talent, human resources, analytics and technology expertise. PwC’s Global Workforce Network has a proven track record of helping our clients across all industries to deliver value through people by maximising workforce performance, optimising costs and managing risk, resilience and reputation. If you’d like to discuss the content of this article, or anything related to UK or global payroll operations and PwC workforce services, please contact: Emily Webster Director, Employment Solutions, at: emily.webster@pwc.com PwC’s Global Workforce Network
Mike Loydon PwC Global and UK Payroll Services Leader, at: michael.loydon@pwc.com
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