Small Business HR Compliance Checklist 2026 (UK)

Quick Answer: UK Small Business HR Compliance at a Glance

---

Section 1: Employment Contracts and Documentation

Written Statement of Particulars

Every employee must receive a written statement of employment particulars from their first day of work. This is a legal requirement under the Employment Rights Act 1996, as amended.

The statement must include:

• Employer and employee name and address
• Job title and description
• Start date and (if different) continuous employment start date
• Pay rate and when paid
• Hours of work
• Holiday entitlement
• Sick leave and sick pay arrangements
• Notice period (both sides)
• Place of work
• Pension scheme details

Compliance action:

• Issue written statement on or before day one
• Use a template that covers all mandatory particulars
• Update the statement when terms change and re-issue within one month

Offer Letters and Job Adverts

Job adverts must not discriminate on the basis of age, sex, race, disability, religion, sexual orientation, or other protected characteristics under the Equality Act 2010.

• Review job adverts for discriminatory language
• Specify whether roles are open to flexible working arrangements
• Confirm salary ranges are NMW-compliant

---

Section 2: Right to Work Checks

Every employer must carry out a right to work check before employment begins. Failure is a criminal offence carrying a civil penalty of up to £60,000 per illegal worker.

How to carry out a right to work check

British and Irish citizens:

1. Request original documents (passport, birth certificate + NI letter, etc.)
2. Check the document is genuine, unaltered, and belongs to the holder
3. Make a copy (or scan) and record the date of the check

Non-UK/EEU citizens (post-Brexit):

• Use the Home Office online checking service with the employee's share code
• Record the date and result of the online check

Compliance checklist:

• Right to work check completed before first day
• Document copies stored securely
• Check date recorded alongside document copy
• Process for expiring documents (time-limited leave to remain) in place
• Re-check process for employees on time-limited visas

---

Section 3: Pay and National Minimum Wage

National Minimum Wage (from 1 April 2026)

NMW applies to all workers, including part-time, zero-hours, and agency workers. It applies to total pay after deductions — so deductions for uniforms, tools, or accommodation can push pay below NMW.

Compliance checklist:

• All worker pay rates at or above April 2026 NMW
• Deductions reviewed to ensure net pay is not below NMW
• Payroll updated before 1 April 2026
• Zero-hours workers tracked on actual hours worked (not contracted)

Payslips

Every worker is entitled to a payslip on or before pay day. Payslips must itemise:

• Gross pay

• All deductions (and their amounts)

• Net pay

• If pay varies by hours: number of hours worked

• Payslips issued on or before pay day to all workers

• Deductions itemised clearly

• Payslips accessible (digital is fine)

---

Section 4: Holiday Entitlement

Statutory Annual Leave

All workers (including part-time and zero-hours) are entitled to 5.6 weeks paid annual leave per year.

Bank holidays can count toward the 28-day entitlement. You can choose to give bank holidays on top of the statutory minimum, but you are not legally required to.

Compliance checklist:

• All workers have minimum 5.6 weeks leave entitlement
• Pro-rata calculation in place for part-time workers
• Leave accrual tracked from day one (including irregular-hours workers)
• Carry-over policy compliant with Working Time Regulations
• Holiday pay calculated correctly (including regular overtime and commission)

Holiday Pay Calculation

Holiday pay must reflect normal remuneration, not just basic salary. If an employee regularly works overtime or earns commission, holiday pay must include a reference period average.

• Holiday pay calculation reviewed — includes regular overtime and commission where applicable
• 52-week reference period in use for variable-hours workers

---

Section 5: Sickness and Absence

Statutory Sick Pay (SSP)

Eligible employees are entitled to SSP when off sick for 4 or more consecutive days (including non-working days). From 6 April 2026, the rate is £118.75 per week for up to 28 weeks.

SSP eligibility requires:

• Average weekly earnings of at least £123 (lower earnings limit)
• Sickness lasting 4+ consecutive days

Compliance checklist:

• SSP rate updated to £118.75/week from 6 April 2026
• Absence reporting procedure in place (who to notify, when)
• Fit note process documented (required after 7 days)
• Return-to-work interview policy in place
• Bradford Factor monitoring in place for persistent short-term absence

Absence Management

• Absence policy in place and communicated to all staff
• Trigger points defined for absence review (e.g., Bradford Factor threshold)
• Occupational health referral process documented

---

Section 6: Workplace Pensions (Auto-Enrolment)

All employers must automatically enrol eligible workers into a qualifying workplace pension scheme. This applies to all employers, regardless of size — even if you have just one employee.

Eligible workers are:

• Aged 22 to State Pension age
• Earning over £10,000 per year
• Working in the UK

Minimum contributions (2025/26):

• Employee: 5% of qualifying earnings
• Employer: 3% of qualifying earnings
• Total: 8% of qualifying earnings (on earnings between £6,240 and £50,270)

Compliance checklist:

• Staging date identified (or enrolment date if you are a new employer)
• All eligible workers enrolled from their first day of eligible earnings
• Contributions paid to pension provider by 22nd of the following month
• Re-enrolment of opted-out workers every 3 years
• Declaration of compliance submitted to The Pensions Regulator
• New starters enrolled within 3 months of becoming eligible

---

Section 7: Health and Safety

Risk Assessment

All employers must carry out a written risk assessment if they employ 5 or more employees. However, best practice is to document risk assessments regardless of size.

The risk assessment must:

• Identify significant hazards
• Assess who is at risk and how
• Record control measures
• Review periodically or after any incident

Compliance checklist:

• General workplace risk assessment completed and documented
• Display Screen Equipment (DSE) assessment for computer users
• Manual handling assessment where relevant
• Lone working policy if applicable
• COSHH assessment if chemicals or hazardous substances are used
• Risk assessment reviewed after incidents or significant changes

Mandatory Employers' Liability Insurance

All employers must have employers' liability insurance of at least £5 million. The certificate must be displayed (physically or electronically) where employees can see it.

• Employers' liability insurance in place (minimum £5m cover)
• Certificate accessible to all employees

Health and Safety Policy

If you employ 5 or more people, you must have a written health and safety policy.

• Written H&S policy in place and communicated to staff
• Policy reviewed annually

---

Section 8: Equality and Discrimination

The Equality Act 2010 protects workers from discrimination based on nine protected characteristics:

1. Age
2. Disability
3. Gender reassignment
4. Marriage and civil partnership
5. Pregnancy and maternity
6. Race
7. Religion or belief
8. Sex
9. Sexual orientation

Compliance checklist:

• Equal opportunities policy in place
• Job adverts reviewed for discriminatory language
• Reasonable adjustments process for disabled employees
• Grievance and disciplinary procedures accessible to all
• Anti-harassment policy updated (including third-party harassment under Worker Protection Act)
• All staff trained on equality and harassment — training logged

---

Section 9: Data Protection (GDPR / UK GDPR)

Employers collect and process significant personal data about employees. UK GDPR applies to all of this.

Lawful bases for processing employee data typically include:

• Contract performance (for payroll, benefits)
• Legal obligation (for statutory records, HMRC)
• Legitimate interests (for business operations)

Compliance checklist:

• ICO registration completed if required (check at ico.org.uk/registration)
• Privacy notice provided to employees explaining what data is collected and why
• Data retention periods documented (HMRC requires payroll records for 3 years minimum)
• Subject access request process in place (employees have the right to see their data)
• Data processing agreements with any HR software, payroll, or benefits providers
• Breach notification process in place (72-hour reporting to ICO for serious breaches)

---

Section 10: Disciplinary and Grievance Procedures

Every employer should have documented disciplinary and grievance procedures that follow the ACAS Code of Practice.

A compliant procedure includes:

• Inform the employee of the issue in writing
• Hold a meeting before taking any action
• Allow the employee to be accompanied by a colleague or trade union rep
• Provide a right of appeal against any decision

Key change in 2026: Once the Employment Rights Bill takes effect, fair procedure applies from day one of employment — not after 2 years.

Compliance checklist:

• Disciplinary procedure documented and accessible
• Grievance procedure documented and accessible
• Right to be accompanied communicated
• Appeal process defined
• Procedure updated to work from day one (before Employment Rights Bill commencement)

---

Using Grove HR to Stay Compliant

Grove HR automates the compliance overhead for UK small businesses:

• Leave management: Automatically calculates holiday entitlement, tracks accrual, and prevents over-booking
• Bradford Factor: Monitors short-term absence and flags trigger points
• Document storage: Store employment contracts, right to work copies, and policy sign-offs
• Training records: Log equality and health and safety training with completion dates
• Onboarding checklists: Ensure every new starter receives their contract, right to work check, and pension enrolment on time

Start your free trial and get your HR compliance in order before the next inspection.

---

UK Small Business HR Compliance Checklist — Printable Summary

Before day one:

• Written statement of particulars ready to issue
• Right to work check completed
• Workplace pension enrolment initiated if eligible

First week:

• Written statement of particulars issued
• Payslip process set up
• DSE assessment (if computer user)

Ongoing — monthly:

• Payroll NMW-compliant
• Pension contributions paid by 22nd of month
• Payslips issued on pay day

Ongoing — annually:

• NMW rates checked (update each April)
• SSP rate checked (update each April)
• Risk assessment reviewed
• H&S policy reviewed
• Equality training logged
• ICO registration renewed (if applicable)