From day-one protection from unfair dismissal to a ban on “exploitative” zero-hour contracts, the Employment Rights Bill includes 28 proposals for radical employment law reform that will cost businesses up to £5 billion a year according to the government’s own analysis.

If you’re worried about the impact of the Employment Rights Bill on your business, you’re not alone. According to a BrightHR survey, only 13% of business owners feel ‘fully confident’ they know how to implement the changes presented in the Bill, while a whopping 78% think it will be ‘difficult’ to implement new day-one rights.

What challenges does the Employment Rights Bill represent for SMEs?

Compared to larger employers, SMEs have fewer resources to navigate the many changes. As a result, they are predicted to take on disproportionately higher costs when adapting to the new legislation.

When new laws come into effect, all the tasks an HR department would typically handle in a larger organisation fall onto the shoulders of small business owners, including:

• Updating contracts, handbooks, and policies
• Training employees and managers in new regulations, which is time-consuming and costly, particularly for businesses who cannot afford to take employees away from regular duties
• Digesting and understanding the details of new laws to ensure compliance, which often requires a specialist knowledge of HR and employment law

So, without the benefit of a dedicated HR department, how can small business owners best prepare for the Employment Rights Bill?

Use e-learning courses to upskill your managers and staff

To effectively navigate the Employment Rights Bill, small businesses will need to first upskill their managers and staff. This is essential for making sure everyone is well-versed in the new regulations and can adhere to them with minimal hiccups.

According to the survey, the majority (67%) of business owners think staff and manager training will be a particularly challenging element of implementing the new Bill.

These challenges stem from a lack of expertise, but most critically, from a lack of financial resource. External staff training courses are expensive, and at a time when finances are particularly tight, it is important to find ways of upskilling your staff without breaking the bank.

Plus, without legal knowledge, SMEs risk making costly mistakes, such as failing to provide adequate support for flexible working arrangements or mishandling discrimination claims.

By using an online learning management system, small businesses can simplify this process and easily assign their staff to relevant training courses on new legislation. These systems are useful as they help you comply with new regulations, develop your staff in-house, cut costs at a time where budgeting will be crucial, and avoid costly financial penalties in the future.

Use HR document libraries to easily update your policies

Many of the new laws included in the draft Employment Rights Bill will leave your existing HR documents outdated, including changes to paternity and parental leave, new day-one rights, statutory sick pay (SSP), and zero-hour contacts.

These changes must be reflected in your employment contracts and company policies by the time the laws come into effect. While you may be tempted to put off updating your documents for now, these changes can and will sneak up on you, leading to a last-minute scramble which could have significant legal and financial repercussions.

The real challenge comes with the costs of revising and implementing the new policies. According to data, the cost of drafting a single HR policy in a small business is £590. Then comes the time investment of consulting with a solicitor, which can quickly take you away from running your business.

The best way of adapting to this challenge is making use of an online HR document library, which takes hours off your HR admin and helps you meet your legal obligations with expertly written policies, templates, and guides.

Seek expert advice when you’re unsure

Getting your head around legislation is challenging at the best of times, and even large companies with dedicated employment law experts can sometimes struggle to keep up with the frequent updates.

While the Employment Rights Bill has not yet been fully implemented, we can draw parallels from recent workplace legislation to estimate financial repercussions—and they are severe.

Take, for instance, the new proactive duty to prevent sexual harassment in the workplace, introduced in October 2024. Employers who fail to comply with this new legislation can face an additional 25% uplift in compensation awarded by an employment tribunal. This is on top of already unlimited fines.

Given these significant risks, seeking expert advice for gaps in knowledge is crucial. For expert support and advice, consider consulting BrightAdvice, a 24/7 employment law advice helpline to cut out uncertainty and lower your legal fees. Utilising a service like this can help you navigate changing legislation with confidence.

Conclusion

SMEs can prepare for the Employment Rights Bill by upskilling staff, updating policies, and seeking expert advice to ensure compliance and minimise disruption. Leveraging expert resources and technology to achieve these goals will help turn these challenges into genuine opportunities for your business to grow and succeed.