The Two October Deadlines Most Small Businesses Will Miss

October 2026 employment law changes: a calm SME guide

Picture this. It is September. The office is quieter, the coffee is hot, and you have a small window before life ramps up. Use it. October 2026 employment law changes arrive in two waves, and a little prep now saves a scramble later. This guide sets out what lands and gives you a simple September audit so you hit October ready.

What October 2026 employment law changes land and when?

Two dates matter. Pop both in the diary.

Quick note on time limits. The six-month limit applies to events on or after 1 October. Anything that happened before then keeps the old three-month clock. One Scottish wrinkle: breach of employment contract claims in Scotland move on 9 November 2026. Everything else changes on 1 October across Great Britain.

Right to work: what expands on 1 October

From 1 October, the duty to check right to work moves past payroll staff. It now reaches:

• Workers
• Individual subcontractors
• Platform-based matches and substitutions sent in place of the person you booked

Plain English examples:

• Your Tuesday self-employed cleaner
• Chair renters in a salon
• Subcontracted trades on site
• Couriers and agency temps
• A substitute who turns up instead of the named contractor

Liability can flow down the chain. If you subcontract and your subcontractor sends someone else, you still need a clear route to checks. You can be on the hook for someone you have never met.

Who sits outside this? People running their own business in their own name or company, contracting with you as a customer, remain outside. The accountant doing year end is fine. Labels do not decide status though. What happens day to day does. If someone called self-employed works only for you, on your rota, in your name, take this seriously.

Two practical points:

• Updated Codes of Practice are still in draft as we write. Follow the latest Home Office Employer's Guide as it updates.
• Checks apply to new engagements from 1 October and to repeat checks falling due after that date. No need to re-check everyone at once.

Penalties are well known and painful per worker, and repeat breaches rise. Criminal liability exists for knowing engagement. For current figures, see Gov.uk: Penalties for employing illegal workers.

KUHR tip: Write down everyone who works in your business name and mark who has never been checked. That list is your September to-do.

"Good HR is financial self-defence. Do the checks once, store them well, and sleep at night." - Kate Underwood, HR Queen Bee

Harassment and unions: what changes on 30 October

Stronger sexual harassment duty: "all reasonable steps"

You already take reasonable steps to prevent sexual harassment. From 30 October, the bar rises to all reasonable steps. That means you need to think it through, act, and be able to show your working. A tribunal will ask what you did and what else you reasonably could have done.

What this looks like in practice:

• Clear, short policy that staff actually read
• Manager training that is recent and recorded
• Easy, safe reporting routes, including a route that bypasses senior people
• Proportionate action and evidence that action happened

Useful resource: EHRC guidance on harassment at work: Equality and Human Rights Commission.

Third-party harassment duty

From 30 October, you can be liable if customers, clients, suppliers, contractors, or the public harass your team. This covers any protected characteristic, not only sex. The old "three strikes" idea has gone. If your team faces abuse from someone outside the business and you did nothing to prevent or address it, risk follows.

Trade union changes

You will need to tell workers they have the right to join a trade union. Onboarding materials and written statements should include the right information. Electronic voting in trade union ballots is now possible where both sides agree. Most SMEs can handle this with a tidy update to documents and templates.

ACAS is your north star for fair process. See: ACAS discipline and grievances at work.

Tipping: later this year

If you handle tips, service charges, or gratuities, you will need to consult workers before starting or changing a tips policy. A revised draft statutory Code on fair and transparent distribution is out for consultation. This reaches past hospitality into salons, delivery, events, and some retail. Due by the end of 2026. Plan now, avoid a rush later.

Four quiet August updates you should actually know

• ACAS has a draft new Code on disciplinary and grievance procedures open for consultation. It shifts tone to early resolution, clearer suspension rules, adjustments, and uses "worker" not "employee".
• The revised tips Code consultation is open now and closes this month.
• A consultation on zero hours and casual working has closed. Expect rules on guaranteed hours from reference periods, notice of shifts, and pay for short-notice changes. If you run rotas, start improving notice now.
• The Fair Work Agency secured its first conviction and obtained a Labour Market Enforcement Order. The agency is moving from letters to prosecutions. Holiday pay is in focus. If you suspect your calculations are off, fix it quietly this autumn.

"Early action beats early panic. Ten minutes on a consultation now can save you ten grand later." - Kate Underwood

Your September audit checklist

Harassment prevention: all reasonable steps

• Read your anti-harassment policy as a new starter would. Is it clear and current? Does it say what to do and who to tell?
• Share it. A file nobody reads is not a step. Tell people where it is and what it means.
• Train managers on spotting and handling concerns. If training is thin, book a session now. Try our weekly line manager series, Cake, Coffee and Compliance: Manager training.
• Add a safe route to report concerns about senior people.

Third-party harassment

• List third-party contact points: customers, clients, contractors, public. Mark the hotspots.
• Tell staff they can report harassment by customers or clients. Make that explicit in policy and training.

Right to work

• List everyone doing work in your business name. Not just payroll.
• Mark who has a completed check and where the evidence sits. Gaps get fixed first.
• Update contracts with agencies and subcontractors so checks happen and evidence flows.
• Pick an owner for checks from 1 October. Do not assume agencies have it covered.

Records and process

• Pull one recent disciplinary, grievance, or absence file. Would it hold up six months later? If not, tighten notes, dates, letters, and adjustments.
• Use occupational health for tricky absence cases and record your adjustments.
• Refresh contracts and written statements. Union information lands in October, more changes hit in January 2027, so one careful pass now saves time later.

Tips and unions

• If you handle tips, plan your worker consultation and policy draft now.
• Add the right-to-join-a-union information to your onboarding pack and written statements.

Work through this list and you will have a clear picture of what needs action now and what can wait a few weeks.

Why September is your best window

The businesses that struggle rarely ignore risk. They just run out of time. September gives you calm, diary space, and fewer interruptions. Book training, update policies, and have the honest chat about that one difficult client. A steady month now beats a frantic one later.

While you are looking: a word on collective consultation

If larger-scale redundancies might come up, collective consultation can bite sooner than many expect. It can start at the point you propose dismissals, not once minds are made up. Since 6 April 2026, the protective award doubled to 180 days of gross pay per affected employee. If this is even on the horizon, take advice early. Timing is simple when planned and painful when rushed.

Need a clear plan?

If you want a month-by-month view of how the Employment Rights Act rollout phases in, see our Employment Rights Act timeline. For media pieces on plain-English HR, see our press page.

Want a practical, plain-English review of your paperwork and risks before October hits? Book our HR Health Check. We give you a to-do list in priority order. Kettle on, standards up.

FAQs

• What are the October 2026 employment law changes for SMEs? Two waves. On 1 October, tribunal time limits rise to six months for most claims and right to work checks expand to workers and some contractors. On 30 October, the sexual harassment duty rises to all reasonable steps, third-party harassment liability arrives, and you must tell workers they can join a trade union.
• Do I need to re-check right to work for contractors and substitutes from 1 October? Checks apply to new engagements from 1 October and to repeat checks falling due after that date. You do not need to re-check everyone at once, but list everyone working in your business name and close the gaps first.
• What counts as "all reasonable steps" to prevent sexual harassment? A clear, short policy people actually read, recent and recorded manager training, safe reporting routes including one that bypasses senior people, and evidence that you acted on concerns.
• Can I be liable for harassment by a customer or supplier? Yes, from 30 October. The old "three strikes" idea has gone. If someone outside the business harasses your team and you did nothing to prevent or address it, risk follows.
• Do I need to tell new starters about trade unions and how? Yes. Add the right to join a trade union to your onboarding pack and written statements before 30 October.
• How should I prioritise my September HR to-do list? Start with right to work gaps, then harassment policy and manager training, then contracts, written statements and any tips consultation. The September audit checklist above is in priority order.

External references

• Gov.uk: Penalties for employing illegal workers
• ACAS: Discipline and grievances at work
• EHRC: Sexual harassment at work

Internal KUHR resources

• Manager training: Cake, Coffee and Compliance
• Employment Rights Act timeline
• Press page
• HR Health Check