A growing global patchwork of tighter pay reporting and transparency related requirements means that global employers should be vigilant about monitoring current pay practices and adhering to the differing obligations placed upon them globally. 

From 7 June 2026, the EU Pay Transparency Directive will introduce significant changes in relation to transparency, imposing a plethora of duties on employers, from the initial recruitment stage to throughout the full cycle of the employment relationship. While the Directive’s requirements are subject to local implementation by each EU member state (the progress of which is fragmented, with certain member states confirming delays, and others not having not taken any substantive steps to implement the requirements), the overarching requirements imposed in the EU Pay Transparency Directive itself raise the bar for pay transparency related practices. 

Transparency on hire related requirements and greater scrutiny of recruitment related practices are two key aspects of the Directive’s requirements which will significantly impact the recruitment industry. As a result of the Directive, employers (including third party recruitment agencies) will no longer be able to ask candidates in the EU about their pay history. In addition, candidates will gain rights to be informed of the applicable pay range or salary for the role they are applying for, either in the job advertisement, prior to interview, or in another form, subject to local legislation provided in each EU Member State. Training for internal recruiters on what can and cannot be said to candidates and the information they are required to receive in a relevant country will be important to ensuring compliance with the Directive’s requirements. Organisations should also seek confirmation from their external recruitment partners that they are aware of the Directive’s requirements and will ensure compliance.

The variance in these laws, coupled with the lack of guidance in certain laws regarding the geographic scope of their applicability, has made compliance an increasingly complex exercise.”

To comply with the Directive, employers should also be aware of the following key obligations designed to promote pay transparency and pay equity:

• Equal work and work of equal value: Member States must ensure that employers implement pay structures that guarantee equal pay for equal work or work of equal value, supported by accessible analytical tools, methodologies and structures designed to help assess and objectively compare the value of work, based on gender-neutral criteria.

• Rights to information: Employers of all sizes (regardless of headcount) must be prepared to provide all workers with written information, upon request, about their individual pay and the average pay levels, broken down by sex, for workers performing comparable work or work of equal value. 

• Gender Pay Reporting: Employers must provide information regarding the mean and median gender pay gaps, including: (a) those based on complementary and variable pay components (such as bonuses), (b) the proportion of men and women receiving these pay components, (c) the gender distribution within each pay quartile and (d) pay gaps across worker categories broken down by basic salary and complementary or variable pay. (a) – (c) must be reported to the relevant authority and shall be made publicly available. (d) must be provided to workers and workers’ representatives, as well as the labour inspectorate and the equality body upon request. The thresholds are as follows: 1) Employers with 100-149 employees: Must publish the report by 7 June 2031 and every three years after; 2) Employers with 150-249 employees: Must publish the report by 7 June 2027 and every three years after; 3) Employers with >250 employees: Must publish the report by 7 June 2027 and annually (and, it should be noted, that some individual countries propose to introduce lower headcount thresholds for reporting).

• Joint pay assessments: Employers subject to the reporting obligation must conduct a joint pay assessment if their report shows a gender pay gap of 5% or more in any worker category that cannot be justified by objective, gender-neutral criteria and remains unaddressed six months after reporting. Additionally, employers are required to remedy unjustified pay differences promptly in cooperation with workers’ representatives, with possible involvement from the labour inspectorate and equality body.

Prepare now – wherever you are

Employers should not underestimate the preparation required to comply with the Directive’s requirements and are encouraged to make preparations in and advance of local implementing legislations coming into force in each country.

Where different standards and competing obligations exist across an organisation’s global footprint, employers may wish to consider whether to implement greater standards of transparency across their global operations. As awareness of the Directive’s requirements grows across employee populations employers may wish to be prepared to respond to employee’s expectations when it comes to pay transparency and pay equity related issues.

Employers with a presence in the United States also should remain mindful of the evolving patchwork of US pay transparency laws, as well as the increasing legal scrutiny of DEI-related practices.  

From a pay transparency perspective, while no comprehensive federal pay transparency statute currently exists, a growing number of US state and local jurisdictions – including California, New Jersey, New York, Illinois, and Washington – require employers to disclose compensation ranges in job postings and, in some cases, provide pay information to employees upon request. Certain jurisdictions impose further disclosure obligations on employers, including additional compensation details, benefit information, job descriptions, and application deadlines. Critically, the laws vary widely in terms of whether they apply only to positions within that jurisdiction, and whether the law expressly addresses applicability to remote positions or out-of-state positions. The variance in these laws, coupled with the lack of guidance in certain laws regarding the geographic scope of their applicability, has made compliance an increasingly complex exercise.

Multinational employers in the US also should remain cautious of the increasing scrutiny and legal challenges to DEI-related practices, both from government agencies and the plaintiffs’ bar. This evolving US landscape creates notable tension with the EU’s expanding equal pay and pay transparency framework, which increasingly requires employers to collect demographic data, analyse systemic disparities, and implement corrective measures designed to advance substantive equality outcomes. Multinational employers must therefore navigate potentially conflicting expectations regarding workforce equity governance and permissible remediation strategies.

Louise Skinner is a partner at Morgan Lewis based in London. Louise provides strategic advice on all aspects of employment law, with a particular focus on equality and pay transparency matters.

Aaron Grant is an associate at Morgan Lewis based in London. Aaron advises multinational employers on a range of employment law issues. 

Margaret (Maggie) McDowell is an associate at Morgan Lewis based in Philadelphia. Maggie advises clients on a wide range of workplace matters, with a focus on employment disputes.

As the need for compliance becomes more urgent there are suggestions that this could be an opportunity for HR professionals to take a firm step forward to assuming a more strategic role. Indeed, as the Employment Rights Act begins to impact on the workplace, not taking the initiative in this way could result in the function becoming further seen as purely administrative, associated with the application of rules and regulations and therefore simply contributing to the daily grind of running and managing a business. 

So what does the way forward look like? According to two academics from the sector it’s a question of being proactive rather than reactive. 

“HR professionals need to move from reactive compliance to anticipatory capability,” says the Professor of Responsible Leadership, Trinity Business School, Professor Na Fu. She calls on HR to work closely with legal and finance functions in order to translate regulation into organisational priorities. As part of this HR should always be proactively considering and interpreting policy developments, identifying how these can be implemented to the good of their organisation.

She gives the example of the EU Corporate Social Responsibility Directive. Rather than responding to this regulation as a reporting exercise, she says HR has an opportunity to use this requirement to position workforce, skills, and talent development within the context of sustainability and long-term value creation. “This only happens if HR actively engages, asks the right questions, and collaborates across functions,” she notes. 

A role for technology

Technology and particularly AI can play an important role here. Used responsibly, the technology can help HR interpret complex regulatory landscapes more quickly, identify gaps, and support more consistent, evidence-based decisions. It can even enable better integration across functions, moving the organisation away from the silo mentality that often makes compliance more difficult to implement and more disruptive for the business in general. 

For Professor Na Fu compliance is not inherently bureaucratic. “The problem is how organisations approach it,” she says. With the right mindset, skills, and tools, compliance can shift from a reactive obligation to a forward-looking capability that strengthens organisational effectiveness and strategic alignment.

Ivona Hideg, Professor of Organisation Studies at Saïd Business School, University of Oxford believes that the real impact of regulations on business depends on how compliance is communicated and experienced within the organisation. “When it is positioned as a set of top-down rules, it tends to reinforce a sense of bureaucracy,” she explains. In Hideg’s view if compliance is framed as a shared framework – clearly explained, transparently applied, collectively owned – it can form the foundation for stronger trust, greater inclusion, and more effective day-to-day collaboration for businesses.

When communication reflects this and acknowledges real experiences, trade offs and the practical impact on individuals, it humanises compliance.”

Communication is particularly important as it needs to clearly address the ‘why’ of compliance – concentrating only on the ‘what’ and ‘how’ of policies will not lead to genuine understanding among employees and consequently a lack on buy in. “While regulations often introduce complexity, organisations that take the time to explain why policies exist, what risks they mitigate and whose wellbeing they protect, demonstrate respect for employees as people rather than simply as subjects of rules,” she says.

To do this effectively HR needs to consciously centre on people, rather than policies. Meanwhile the policies themselves should be seen to support fair and consistent treatment rather than policing behaviour. “When communication reflects this and acknowledges real experiences, trade offs and the practical impact on individuals, it humanises compliance,” says Hideg. “In doing so, it shifts compliance from a technical requirement to something more meaningful and relatable, strengthening both engagement and trust.”

People are more likely to accept outcomes, even difficult ones, when they understand the reasoning and feel that processes are applied with care and fairness.”

Transparency has a key role to play here – there needs to be honesty and trust in compliance – that these rules and regulations exist for a clear reason rather than just for the sake of it. Clear and consistent explanations of decisions, especially in areas like pay, progression or grievances, reduce perceptions of arbitrariness. “This openness is essential to trust,” says Hideg. “People are more likely to accept outcomes, even difficult ones, when they understand the reasoning and feel that processes are applied with care and fairness.”

While compliance may seem to be something that HR needs to develop and then deliver to employees, Hideg advocates involving employees in the process. This could mean seeking input when designing policies, inviting feedback on how they operate in practice, and enabling managers to have thoughtful and human conversations around the issue. On the one hand this brings compliance closer to the people on whom it impacts, but it also creates space and opportunity to identify where policies may unintentionally disadvantage certain groups. In this way, the work of enacting compliance can actually create a more inclusive organisation. 

“Growing regulation need not signal bureaucracy,” asserts Hideg. “When organisations centre people, communicate with empathy, and treat compliance as a collective responsibility, it becomes less about control and more about care, creating an infrastructure for fairness, trust and a more inclusive workplace.”

Compliance should not therefore come with a heart drop every time it is mentioned, but be treated as an opportunity to reinforce positive messages around the organisation. For HR it is a chance to demonstrate care for employees and to involve them in the creation of the workplace, the management of work and responsibility across all aspects of the organisation. In this way it become a strategic tool for HR in ensuring the workforce and workplace are both fit for the future – and that in turn is something with which all company leaders should want to engage. 

As HR and the organisations it serves face one of the most challenging times in terms of compliance and changes to employment law, there is a danger that all HR might be known for among employees is policing and risk management. As employing people becomes more complex and arduous it falls to HR to apply the new laws and requirements and make sure everyone within their organisation is operating correctly. 

But does it have to be this way? Is compliance simply nothing more than keeping on the straight and narrow, or can be more human?

“HR compliance, handled in the right way, should not be seen as a tool of control, it is the foundation of trust,” says Kayleigh Wright, HR Director at HSS ProService Marketplace. “When organisations treat compliance as something that is ‘done to’ people, it can feel like box ticking and policing, but when it is governed well, it creates the conditions for fairness, consistency and confidence, which ultimately benefits employees and employers alike.”

Consistent and transparent

Wright goes on to note than handled correctly, compliance can create clarity, consistency and transparency. All positive elements to promote within the workplace. It sets expectations that people can actually understand and rely on, rather than leaving them to interpret a shifting set of informal norms: “That matters because workplaces are rarely undermined by a lack of policies, but by a lack of predictability,” she notes. “When the rules are clear and applied consistently, it becomes easier for managers and leaders to act confidently, not cautiously. Decisions can be made more quickly because the organisation is not constantly negotiating what is ‘allowed’ or ‘fair’ on a case by case basis. In that sense, compliance is not the opposite of agility – done properly, it is what makes agility safe.”

Addressing the forthcoming employment law changes, Wright believes it is wrong to frame the changes ‘more bureaucracy’ and to simple respond with more policies, process, and complexity. She believes transparency and simplicity can be achieved instead with businesses being open with leadership teams and colleagues about enhanced rights and the areas that impact their work. She advises companies to communicate early: “If organisations are vocal, clear and consistent, the changes can be framed as progress in fairness rather than a compliance burden,” she says.

Charlotte Wills, Partner, Fragomen believes the current combination of economic pressure, geopolitical instability and acute talent shortages means organisations need to act faster and start accurately anticipating risk. “A unified workforce strategy – anchored in immigration expertise, risk management and grounded in data – is no longer optional but is fundamental to achieving both operation objectives and broader business priorities,” she advises. “HR and global mobility functions sit at the centre of this shift.”

Compliance, control, competitiveness

Wills argues that HR and mobility functions have evolved beyond simply being operational support roles. They are governance instruments, cost-control levers, communication channels and enablers of talent strategy. “The organisations we support are seeking more sophisticated strategic guidance, typically structured around three interconnected pillars – compliance, cost control and competitiveness through robust talent pipeline design.”

Wills also see compliance linked to other parts of business activity, particularly reputational risk and brand integrity. With the digitisation of borders and other initiatives, there is increased scrutiny of who travels, when, and for what purpose. This element can be complicated by the use of remote and hybrid working models with the result that creating the modern workforce can bring with it a series of new and complex risks. “Organisations that treat immigration and mobility compliance as a strategic risk function, rather than a reactive process, are better positioned to protect both their workforce and their organisational reputation,” says Wills.

It transforms mobility from a transactional process into a strategic enabler aligned to short, medium and longer term business objectives.

Importantly Wills also sees a competitive advantage to be gained from good compliance. “Without proactive workforce planning, hiring and mobility becomes reactive, most expensive and more time pressured,” she says,”often resulting in a diminished experience for both the business and the individual.”

Getting compliance right and integrating it into the everyday operation of the business and the company can develop a forward looking approach to workforce planning enabling agility, cost efficiency and longer term operational resilience. “It transforms mobility from a transactional process into a strategic enabler aligned to short, medium and longer term business objectives,” Wills says.

Know your workforce

“Compliance gets a bad rap because people treat it as the destination,” says Jools Barrow-Read, Founder, RedWizard. “It isn’t – it’s actually a very important enabler.”

Barrow-Read notes that for permanent staff, HR has always owned compliance – having sight over who’s employed, on what terms, with what rights. However, if the rest of the workforce are considered — the contractors, freelancers, agency workers, umbrella workers she says most HR teams are ‘flying blind’ with up to 40% of people who work for a business sitting completely outside HR’s awareness.

“Every new piece of legislation – whether it’s employment rights reform for perm staff or the upcoming umbrella changes for contractors – is essentially asking the same question – do you know your workforce?” She says. “The policing narrative comes from HR feeling like they’re being made responsible for something they don’t control. And that’s fair. But the opportunity is to flip it – use compliance as the reason to finally get that visibility, because what you find on the other side is genuinely valuable.”

It stops being about risk and starts being about strategy – capacity planning, cost visibility, make-vs-buy decisions.”

For Barrow-Read in IR35 ‘off-payroll’ legislation is as case in point. Design to combat tax avoidance where individuals working through their own limited companies were actually full-time employees the businesses that handled it well didn’t just avoid penalties but came out with better supplier relationships, cleaner governance and a workforce picture that actually reflected reality. “Compliance forced a conversation that unlocked something much more strategic,” she observes.

“Once HR knows what their total workforce looks like, the questions change,” she continues. “It stops being about risk and starts being about strategy – capacity planning, cost visibility, make-vs-buy decisions. That’s where HR’s real opportunity is. Not policing. Orchestrating.”

Barrow-Read also draws attention to the human dimension of compliance that is often missed: “Compliance isn’t just about protecting the business,” she says. “It’s about making sure the people in that workforce are being paid correctly and treated fairly. HR is well placed to own that – and it’s a much more compelling reason to care about compliance than avoiding a penalty.

“In the right hands, compliance does not make HR a risk management function,” says Kayleigh Wright. “It makes HR the builder and steward of trust, which is what allows organisations to perform well, fairly, and to remain commercially viable.”

The Employment Rights Act 2025 is more than a legislative update: it is a comprehensive A–Z overhaul of UK employment law, affecting everything from agency workers to zero-hours contracts. 

April 2026 will introduce some changes, but the reforms with the biggest impact are still to come – particularly the reduction of the qualifying period for unfair dismissal from two years to six months, effective for all employees from 1 January 2027. For HR leaders, this requires attention now, even though the change won’t take effect for another year.

The first changes

April 2026 is the first operational checkpoint. Statutory Sick Pay will be payable from the first full day of absence, with the removal of the three-day waiting period and the lower earnings limit. More employees will qualify, which may increase short-term absence costs. Even a small increase in recurring absences can have a disproportionate impact on team capacity and payroll, so it’s worth running scenario modelling now. Employers should review absence policies and pay particular attention to short-term, intermittent absences.

Paternity leave and unpaid parental leave will also become day-one rights, removing previous service thresholds. Managers must be ready to discuss these entitlements with new starters from day one.

The maximum protective award for failing to comply with collective redundancy consultation rules will double from 90 to 180 days’ pay per affected employee, raising the stakes for redundancy processes. Disclosures relating to sexual harassment will gain explicit whistleblowing protection, and the new Fair Work Agency is expected to consolidate enforcement functions, signalling a more coordinated approach to compliance. These changes highlight the broader trend: earlier rights, greater scrutiny, and the need for stronger, more formal processes.

New year new changes

Arguably the most significant change will arrive in January 2027. Reducing the unfair dismissal qualifying period to six months changes how early employment risk must be managed. Two years’ service has long acted as a safety net; from 1 January 2027, all employees with six months’ service – which will include all those who joined before 1 July 2026 – will be protected. New hires after this date will also qualify after six months. Organisations will need to ensure fair reasons and processes are demonstrable far earlier than under the current two-year threshold. Probation, onboarding, and early performance management will become even more critical, and preparing now will make the transition smoother.

robust record-keeping and documentation is even more important for employers.”

Two other changes make early-stage risk management even more important. First, the removal of the unfair dismissal compensation cap (also expected 1 January 2027) means claims from high earners could carry significant financial exposure. Even a single claim could exceed six figures, so senior hires, specialist roles, and executives warrant extra attention during recruitment, probation, and performance management. Second, tribunal claim time limits will increase to six months for most claim types. This is expected from October 2026. In conjunction with extensions to the ACAS conciliation process, which are already in force, these changes mean employees will have significantly more time to start conciliation and bring a claim – and the longer window increases the likelihood that organisations will face claims long after dismissal. With employment tribunal backlogs already high and cases taking longer to reach hearing, this makes robust record-keeping and documentation even more important for employers.

Recruitment as risk management

Going forwards, recruitment must be treated as risk management. Hiring mistakes will be harder and more expensive to undo under the new framework, so structured interviews, objective scoring, consistent assessment criteria, and thorough documentation are essential. 

Probation periods will also take on greater significance. In many organisations, six-month probation is loosely managed, with limited documentation. That will no longer suffice. Contracts should clearly set out probation length, expectations, and extension options. Review meetings should be diarised, structured, and recorded, with feedback that is timely, constructive, and documented. Probation will become the primary safeguard in the early months of employment.

For example, a candidate dismissed after seven months for capability issues could bring an unfair dismissal claim – even if their probation period was loosely documented. Informal, gut-feel recruitment processes leave organisations exposed if early employment relationships break down. Now is the time to review panels for consistency, ensure all decisions are documented, and confirm selection processes are robust and defensible.

Care for contracts

Contracts themselves require careful attention. Government proposals indicate that restrictions on dismissal and re-engagement practices are coming (expected 1 January 2027). While details remain under consultation, the direction is clear: relying on dismissal and rehire to implement changes to terms and conditions will carry legal risk. Now is the time to review variation clauses, mobility clauses, and other contractual mechanisms. Future-proofing contracts now is far easier than retrofitting them later.

Policies will need rolling updates. April 2026 changes, such as sickness absence and some family leave, are just the start. Further reforms – including zero-hours contracts, flexible working and other family friendly rights – are still under consultation. Treating policies as living documents will save repeated effort. The most effective HR teams will need to link updates to manager briefings and training, ensuring managers understand not just what has changed, but why it matters and how it should influence day-to-day decision-making.

It is the changes later this year and into next that are likely to have the greatest practical impact.”

Preparation is key. Organisations that review recruitment, formalise probation, update contracts, and implement rolling policy reviews will be far better placed as these changes roll out.

For HR practitioners, the message is clear: now is the moment to be proactive, rather than just ticking compliance boxes. The Employment Rights Act 2025 is reshaping employment relationships across the employee lifecycle.  The April 2026 changes are just the start, but it is the changes later this year and into next that are likely to have the greatest practical impact. Organisations can strengthen recruitment, probation, contracts, and policies now, embedding consistency and fairness from day one. Those who act now will not only reduce risk, but also create workplaces that manage employment relationships effectively at every stage – from the very start and throughout the employee journey.

A round table dinner discussion, hosted by The HR World and sponsored by Pebl brought together a number of HR and business leaders to address the challenges around expanding workforces to take on global employees. As the need for specific talent increases and hybrid employment extends the reach of employers outside their own country, the discussion sought to identify barriers to employing people internationally and provide solutions and ideas as to how the right talent can be used effectively and compliantly.

The discussion was hosted by The HR World’s CEO Mike Beesley with the conversation led and inspired by Carly Jenner, Vice President, People & Culture (Global Head), Apeel and Lindsay Gallard, Chief People Officer, Six Degrees – two highly experienced HR professionals with diverse experience in creating international workforces.

Overall the discussion brought to light the challenge that organisations often seem to be trying to expand their international presence at a pace that exceeds their own internal capacity. Tensions and difficulties can emerge as a result, around areas such as leadership maturity and organisational structure. Participants noted how HR often finds itself trying to manage issues around business ambition, operational readiness and the consequential risk. Indeed, it seems that often when senior leadership desires a move to an international basis HR is brought in after the decision has been made and charged with making it work – regardless of the realities of the situation, and the challenges this creates legally and culturally.

The need to expand

The situation can be further exacerbated by the sense of urgency that underlies an overseas appointment. The business may feel it needs to secure this talent without delay – it is a necessary and important appointment that will have a swift and noticeable impact on the company. Consequently there is added pressure to navigate the complex regulatory constraints that can exist to make the placement. This results in an onboarding process which may not be the most efficient approach, but because of timing and business need, the resulting model becomes the accepted way of doing things. The business can then gradually find itself building an ever more complex scenario for finding, employing and managing overseas talent.

One round table participant noted that businesses often seem to pursue opportunities without considering the long-term picture. The emphasis is always on exploiting the immediate opportunity rather than reflecting on what the implications might be for the wider organisation in the future. In particular there may be little time for considering what going international may mean from a structural point of view. Taking on overseas employees can therefore create tension between making the move sustainable and safe, while also meeting the immediate ambitions of the business.

Compliance issues around employing overseas talent can extend to many areas including: tax, accommodation, payroll obligations, and local audits, all of which may complicate the picture and make for added expenditure when securing new talent.  In some instances the range and cost of compliance can compromise or even prevent companies from using talent from some regions – the lack of knowledge around local employment laws, cultural norms, hiring expectations and more create too much of a barrier for HR and business leaders to manage effectively.

These issues become more significant the less a company – or more specifically HR leaders – know about a country. Therefore, determining a way to address compliance and management issues around the global workforce can be key for organisations if they want to establish a bank of international employees. Using external agencies such as Pebl can address some of these problems and ease the administrative and legal burdens experienced by businesses engaging this kind of talent. Their use can effectively open the business to better talent from around the world.

The three ‘R’s

Company leaders often want to jump in with both feet without first building the capacity to support an international workforce. As a consequence of this while businesses take aim at international opportunities, HR finds itself trying to catch-up in terms of establishing appropriate support systems. One participant boiled down the issue to the ‘three Rs’ of international expansion: Risk, Readiness and Reward. The issue they had to deal with was that “businesses tend to focus on the reward.”

Naturally the way in which businesses set out to fulfil their international ambitions will depend on the size and culture of that business. Founder-led and high-growth firms tend to focus heavily on opportunity, favouring rapid expansion while sometimes overlooking the infrastructure required to support global operations. Larger companies with more resources and more access to international support can find international expansion easier, being able to rely more on the structures and expertise that already exist within their organisations.

Interestingly the HR experts around the table agreed that while compliance issues might be complex for some countries where they are trying to set up, these issues could at least be understood and managed through education and accessing external knowledge and support. However, the issue of internal leadership maturity can present a bigger challenge and be a greater barrier to expansion for these businesses.

The need for leadership

A major theme emerged here around the lack of investment in leadership and management development, particularly in fast-growing organisations where technical specialists are frequently promoted into leadership roles without appropriate training. “Compliance can be managed,” commented one participant. “Where I think it goes wrong is because businesses don’t have the readiness from a leadership maturity, a cultural maturity to make the right decisions.”

Remote working just exposes lazy management.”

Moreover, the scenario of managing a hybrid and certainly geographically dispersed workforce can highlight weaknesses elsewhere in the business. “Remote working just exposes lazy management,” said one participant, an observation which ultimately highlights the strategic and more long-term work HR needs to do in order to ensure remote international working isn’t just possible but sustainable. This is a question of building the required skills within the business, addressing management skills as well as organisational structure.

Interestingly despite the proliferation of remote working and technology supporting hybrid workforces, there was the suggestion that businesses need to specifically work on improving remote management and communications across the organisation. While many workforces are now dependent on technology to keep them together and in touch with one another, there was a sense that increasing personal contact and working to extend the values of the organisation to every employee wherever they may be would lead to a more inclusive culture for the business around the world. This in turn makes the remote worker more engaged and therefore more effective for the business. With good communications remote employees can deliver better value – an important aspect to consider given the efforts made to recruit and support these employees in the first place.

Creating successful international workforces also requires management to have an appreciation of cultural difference across the regions where its workers are stationed. As one participant noted the way in which people in Europe express their feelings about work is very different to how someone expresses themselves in America. Successful management and co-ordination of these workforces therefore requires the ability to understand these differences and to accept and respond to those differences in a sensitive and practical way.

The discussion clearly felt that the increasing globalisation across the workforce along with the consequent need to manage organisational transformation and workforce strategy felt this signalled an opportunity for HR to take a more strategic role within the businesses they support. Alongside this the successful deployment of employee technology, including AI and the governance surrounding that technology, also indicated a greater role for the HR function.

In the case of AI governance in particular, different regions have different levels of acceptance, legal and compliance requirements around this technology use. As such HR is unlikely to be able to simply adopt a single ‘one-size-fits-everyone’ solution to each new location. Local sensitivities as well as local legal demands need to be understood and reflected in policy and procedures.

Local regulations will also apply to other areas of working practice – hours expected to be worked, ‘switch off’ time from business communications and so on. Again, HR must be at the forefront of understanding these aspects of work and ensure they can be met within a productive working relationship.

HR needs to be in the driving seat as expansion occurs.”

Despite the challenges that exist for companies who want to push for a more international workforce, there is clear enthusiasm for and advantages to be gained around employing people overseas. Indeed, the enthusiasm for founder-led businesses and SMEs to go global and exploit the international workforce, has created what the discussion termed as “mini-multinationals” – relatively small companies which work across multiple countries with distributed teams.

If organisation are going to get the most from these arrangements HR needs to be in the driving seat as expansion occurs. It is clear that preparing for such expansion in advance of significant employee investment is desirable if a business is going to go international in a smooth and coherent way. As such these international moves signal another strong reason why HR should gain and retain a seat at C-suite level in order to be able to orchestrate the successful employment and use of international talent wherever it may be.

Pebl enables businesses to build a global team in minutes—no entity needed. Pebl’s AI-powered, expert-backed platform manages hiring, onboarding, payroll, benefits, and local compliance so you can access top talent anywhere.

Q1: How concerned should I be about compliance in terms of what I might be doing wrong? I’m worried there may be small technical errors we’re missing unintentionally – can these still pose large problems for us? 

Kirstie Jones: Compliance should be your number one priority, from authorising officer, through key contact and other team members everyone needs to be aware of the compliance, and be checking it. I do think that systems like Borderless are very good to consider if you don’t have a large team. The audit teams from UKVI expect you to know your responsibilities and be able to evidence you have all the compliance elements right.

Matthew Bond: Even small, unintentional compliance errors can create significant risks if left unchecked – from fines to licence suspension. The Home Office takes a “strict liability” approach, meaning intent doesn’t always matter. Using Borderless helps providers mitigate these risks by flagging potential issues early and ensuring robust compliance processes are in place. That way, you can stay confident that nothing slips through the cracks.

Q2: There seem to be new ideas/initiatives/changes for visas and employing immigrants every week. Do you think things will continue to get harder or do you think the government will find more ways to bring this kind of talent to employers? Do you think employers are aware of all the visas that could work for them? 

Matthew Bond: The pace of change in immigration policy has definitely accelerated, and while some measures have tightened access, there’s also been a push to create new pathways where labour shortages are most acute. I think we’ll continue to see this “push–pull” dynamic, with rules tightening in some areas and new opportunities opening in others. For employers, the key is staying proactive and engaged so they’re prepared to adapt quickly and make the most of the options available.

Kirstie Jones: I think we will continue to see changes from Government and it is going to get harder to employ talent via this route. I would urge anyone to attend any seminars they can on the subject and sign up to the daily government updates, as this should keep you on top of the changes.

When HMRC introduces joint and several liability for umbrella company tax failures in April 2026, many organisations will discover they have a significant blind spot. Nobody is actually accountable for their extended workforce. This isn’t just a tax issue, though that’s how it’s being presented. It’s a strategic workforce governance problem that’s been hiding in plain sight for years, and HR leaders are uniquely positioned to fix it.

The Risk Nobody’s Managing

From April 2026, if an umbrella company fails to pay the correct PAYE tax and National Insurance Contributions, HMRC can pursue your organisation for the full amount. Not just a portion. Not a penalty. The entire unpaid tax bill, plus interest and potential penalties. Whether you’re the recruitment agency in the supply chain or the end client using the workers, you’re now on the hook.

Before we go further, let’s be clear about scope. Your extended workforce includes contractors, consultants, temporary workers, freelancers, interim specialists, and agency workers. Not all of these are engaged through umbrella companies – consultants often work through their own firms, freelancers may be genuinely self-employed. But if your organisation uses umbrella companies for any part of your extended workforce – typically contractors, temporary workers, and interim specialists – this legislation creates direct financial liability for you. More importantly, it exposes a much wider governance gap affecting your entire extended workforce.

The shift in risk here is fundamental. Previously, if an umbrella company didn’t meet its tax obligations, that was between the umbrella and HMRC. Now? Your organisation becomes jointly and severally liable. In practical terms, HMRC can choose to pursue your business first, before even attempting to recover from the non-compliant umbrella company. There’s no “reasonable steps” defence. No safe harbour. The liability is absolute.

For organisations with significant extended workforces, this exposure could run into millions of pounds. Here’s the uncomfortable truth, though: in most organisations, nobody has their eye on this particular ball.

The Ownership Gap

I see the same pattern repeatedly in my work with organisations across multiple sectors. Extended workforce management falls between the cracks of traditional business functions. Procurement manages supplier relationships and contracts. Finance processes invoices. HR focuses on permanent employees. And the extended workforce? It somehow becomes everybody’s responsibility, which means it’s nobody’s responsibility.

This fragmentation creates risk. Real, measurable risk. When contractors, consultants, and temporary workers are engaged through umbrellas, who in your organisation can answer these questions:

• Which umbrella companies are currently in your supply chain?
• How many workers are engaged through each one?
• What due diligence has been conducted on these umbrellas?
• Who is responsible for monitoring ongoing compliance?
• When was the last time someone verified that PAYE is being paid correctly?

If these questions are met with silence, blank looks, or a vague gesture towards “Procurement,” your organisation is exposed. And you’ve got less than six months to fix it.

Why This Is HR’s Opportunity

The umbrella company reforms aren’t just creating a compliance headache. They’re creating an opportunity for HR to step into a strategic space that desperately needs ownership. I genuinely believe HR is the right function to lead this charge, and here’s why.

You understand people strategy. Extended workers aren’t just suppliers or cost centres – they’re part of your workforce strategy. HR already thinks about talent holistically, and this is simply extending that lens beyond permanent employees.

You bridge multiple stakeholders. Effective extended workforce governance requires collaboration between HR, Procurement, Finance, and Legal. HR leaders are already skilled at navigating these cross-functional relationships. You do this every day.

You care about duty of care. While this legislation focuses on tax compliance, the underlying issue is broader: how organisations treat all their workers. HR’s values-driven approach to workforce management is exactly what’s needed here.

You’re positioned to see the bigger picture. While others focus on transactional elements – contracts, invoices, payment terms – HR can see the strategic opportunity in getting extended workforce management right.

The Wider Strategic Context

The extended workforce represents a significant and growing component of how organisations get work done. In some sectors, extended workers now comprise up to 50% of the total workforce, and that proportion continues to rise. Yet this substantial population often operates in a governance vacuum.

The umbrella legislation is just the beginning. The Employment Rights Bill will bring umbrella companies under regulatory oversight from 2027. IR35 has already shifted off-payroll working responsibilities to end clients. The direction of travel is clear: organisations will increasingly be held accountable for their entire workforce, not just those on the permanent payroll.

Organisations that treat this as purely a compliance exercise will miss the strategic opportunity. I’ve seen this happen. They tick the boxes, maybe switch to accredited umbrellas, and think they’re done. Those that get extended workforce governance right, though? They don’t just mitigate risk. They build competitive advantage. They access talent more efficiently. They make better workforce planning decisions. They understand their true workforce costs and capabilities.

What HR Needs to Do Now

With April 2026 approaching fast, HR leaders should take these immediate steps:

Start the conversation. Schedule a meeting with Legal, Finance, and Procurement. Put umbrella company reform on the agenda. Ask the difficult questions about who currently owns extended workforce governance. Don’t wait for someone else to raise this.

Map the current state. Understand how your organisation currently engages external workers. Which routes to market exist? Where are umbrella companies being used? Who makes decisions about which umbrellas to use? You might be surprised by what you find.

Identify the gaps. Where is accountability unclear? What due diligence processes exist? Are they fit for purpose under the new liability regime? Be honest about the answers.

Flag this to the C-Suite. Frame this as a strategic workforce issue, not just a compliance matter. The extended workforce is part of your talent strategy, and the new legislation means it requires proper governance. Your board needs to understand the financial exposure.

Consider accreditation. Organisations will need to work only with compliant umbrella companies. Look at accreditation bodies like FCSA and SafeRec as a baseline for due diligence. This isn’t a guarantee, but it’s a starting point.

Think beyond April 2026. This is the start of a longer journey toward proper extended workforce governance. What does strategic management of all your workforce look like? Start sketching that vision now.

The Hidden Workforce No Longer

For too long, the extended workforce has been the hidden workforce. Managed through ad hoc arrangements and siloed processes, never quite getting the strategic attention it deserves. The umbrella company reforms are forcing this into the light. While the immediate driver is tax compliance, the underlying need is for proper strategic governance of how organisations engage, manage, and take responsibility for all their workers.

HR leaders who recognise this opportunity won’t just protect their organisations from financial risk. They’ll position their function as the strategic owner of total workforce management. That’s a conversation worth having at board level, and one that elevates HR’s role in the business.

The gap exists. The risk is real. The opportunity is yours. It’s time for HR to step forward, flag the gaps, and shine a light on this critical area. Your C-Suite needs to hear from you before April 2026 arrives, because once that deadline hits, the organisations that haven’t sorted this out will be learning some very expensive lessons.

You can refer to these accredited bodies for more detailed information:

• FCSA (Freelancer and Contractor Services Association) – http://www.fcsa.org.uk/
• SafeRec – http://www.saferec.co.uk/
• www.gov.uk/government/publications/umbrella-companies-tackling-non-compliance-in-the-umbrella-company-market – Official policy paper on the reforms
• www.gov.uk/guidance/paye-rules-for-labour-supply-chains-that-include-umbrella-companies-from-6-april-2026 – Detailed guidance on the new PAYE rules
• www.gov.uk/guidance/working-through-an-umbrella-company – General guidance on umbrella companies

For support in preparing for the upcoming changes, visit RedWizard Consulting or book a conversation at calendly.com/connect-redwizard/30min

The HR World’s webinar, Immigration and employment: Are you really compliant? Sponsored by the immigration platform Borderless, uncovered not just the challenge of being compliant when engaging overseas talent, but more generally the fast changing and ever higher obstacles organisations are facing when trying to access this kind of talent.

With a highly informed and experienced panel consisting of  increasing Matthew Bond, CEO & Co Founder, Borderless, Kirstie Jones, Chief People Officer, Salutem Care and Education and Gareth Neale, Head of Human Resources, Crimson Hotels, the session covered recent changes in Home Office policies and regulations, the challenge of keeping an entire organisation up to date and compliant as well as the challenge of meeting audits when they take place.

What emerged is a highly complex area of employment where HR professionals are often in a difficult situation of having to consider the position of good and in demand skilled employees because they cannot always meet the requirements for keeping them within the organisation.

While the processes and requirements around employing immigrants continues to shift and change, it is clear that good communications, continuous understanding of regulations and investment in appropriate technology can make life easier for HR departments in this respect. Despite everything, there are still ways in which organisations can bring in great talent and employ them compliantly and safely. However, as Matthew Bond noted, the complexity around this kind of employment is such that there are rarely no issues that need addressing and organisations constantly need to work to manage their risk.

Following on from the webinar our panel of Matthew Bond, CEO & Co Founder, Borderless, Kirstie Jones, Chief People Officer, Salutem Care and Education and Gareth Neale, Head of Human Resources, Crimson Hotels give an insight into the realities and challenges of correctly employing overseas candidates in a Q&A session.

This webinar is full of insight and experience from the frontline of employing international talent. It is a must-see for any organisation currently employing immigrants or any who wish to take advantage of this source of skilled workers.

The Labour Party’s Employment Rights Bill has thrown new light on this area. Their changes and general direction has been seen by some as shifting the balance of the employment relationship in favour of the employee.

If this is the case – or even if it isn’t – are there instances where legislations and compliance might actually work against good employment relations? In these days when organisational culture can be as important for businesses as the products or services they deliver, can the law compromise the positive impact achieved by companies, hindering good working relationships within the workplace?

Additional costs to comply

Morag Bailey, Head of HR at prepared fruit specialists PrepWorld UK describes current employment law as

“manageable and logical” although she also acknowledges this could be because HR is now used to how it works. The new proposals she says appear fair although she is anticipating additional costs to her business particularly through day one access to Statutory Sick Pay. This, she argues, could affect the financial position of companies such as hers where there are a high level of hourly paid colleagues. “This cost comes on top of the significant increases in NI and NLW that we are facing,” she notes. “These costs will have to be passed on and our concern is about the impact this will have on the selling price of our product – at what point will customers decide that a discretionary spend product is just too expensive.”

And if a customer no longer spends this may be bad news for the workforce. In theory then, for some organisations the extra cost of meeting what are intended to be good intentions for the workforce, could result in less work. Is this an area where the decision to offer a benefit should be left to the individual HR department who can decide how to manage this and therefore balance cost with the additional employee attraction or retention the benefit could bring?

Similar issues may exist around day one rights for unfair dismissal – particularly because businesses will need to ensue they understand how the new probation period should be managed. “I am fortunate to have a big enough HR and L&D team that we will train out the changes once we have ACAS guidance,” says Bailey, but then adds: “I do worry that smaller HR teams will struggle with the volume of changes that will come in a short space of time.”

Indeed, small scale HR departments could find themselves under particular stress. Their own initiatives may need to take a back seat as they find themselves on the back foot, running just to catch up. This may not be good for employer relations – an HR department struggling to cope with new legislation and how it should be applied, may not be one that can focus on getting the best from its workforce. 

When compliance isn’t an issue

“I think that a lot of employment law, and case law, comes into being because of bad employers,”

comments Elsie Coke, Chief People Office at HomeLink Healthcare.

“An employer shouldn’t need legislation to tell them to treat pregnant employees well, or that men and women should have equal pay for work of equal value. So generally speaking, if you are an employer that treats your employees well, compliance with employment law shouldn’t be an issue.”

Elsie highlights the extending of the time limit for employment claims as another possible challenge for HR departments. By extending the time of uncertainty around whether a claim will or will not be lodged by a disgruntled employee the law change could bring additional stress to departments and take up important resources:

“With ACAS early conciliation, it is already at 4-5 months you might get an unwelcome ET1, and for some reason many employment lawyers seem to like to put the claim in at the very last possible moment,”

she says. The later a claim is lodged the more difficult it becomes for managers to fully recall the details of the end of an employment relationship, so a time period of six months could represent a challenge for everyone involved.

That said Elsie reports there have been managers – not at her current workplace – who have complained that employment law is skewed in favour of employees but since employers have the majority of power in the employment relationship, she believes things are balanced out.

Compliance for a human-centric approach

Florence Carter, VP of People & Culture at learning platform Fuse Universal also feels changes in the law often come for justifiable reasons.

“While some may argue that the increasing number of employment regulations will hinder effective employee relations, I believe these changes often stem from a crucial, human-centric approach to employee relations,”

she says. Carter feels Labour’s proposed changes won’t have too dramatic an impact on her own business, where employees are already benefitting from a comprehensive wellbeing plan and more but again she suggests, smaller businesses, particularly those operating with minimal HR infrastructure, may find the changes significant.

“It’s not necessarily that the regulations are too much, but rather that smaller businesses may need additional support in implementing them effectively,” she says. “Ultimately, while compliance can feel like a burden, it often pushes businesses towards better, more ethical people practices, which benefits everyone in the long run.”

Good people processes start with compliance

“Compliance is the bedrock of the HR function and where employer/employee trust begins,”

says Olivia Spruce, Director at the Payroll Compliance Authority (PCA). “Any employee, whether permanent or temporary, will rightly expect the particulars of their contract to be legally sound and for their pay to align with all tax and employment regulations as a bare minimum.

Spruce believes that while compliance may be an administrative burden, it can be argued that it is more important than any additional added value that an HR professional can provide.

“An employee needs to feel safe in the knowledge that their employer is carrying out their duty and that they won’t experience any unfair treatment or unexpected repercussions as a result of their employment,” she says. “The HR function is a crucial part of fulfilling this obligation.”

That said, Spruce acknowledges compliance can be a significant burden and one that will keep growing as employment laws and practices evolve. She cites the changes occurring around the management of umbrella companies as an example of this as new legislation transfers the responsibility to account for Pay As You Earn (PAYE) and other tax deductions from the umbrella companies that employ the workers to the recruitment agencies that supply the workers or to the end client business. This area of employment has long been subject to complex and changing rules and this trend is unlikely to end soon.

Ultimately, whether employment law represents a headache for HR or a base line from which to build comes down to how well resourced the function is. At a time when there are significant changes in the pipeline there is no doubt but that HR needs all the resources it can get – financial, time and so on – in order to understand and instigate the necessary changes. At the end of the day what the legislation is may not have such an impact as how easy or hard the organisation finds it to introduce and adapt to that legislation.

As the Labour government beds down into its term of office one of the biggest changes the new administration is delivering is in the workplace. The government’s Employment Rights Bill has attracted a great deal of attention and some concern about its impact on employers. On the one hand it represents a time of change and adaptation, but it may also signal a more challenging time for employers, and the need to address potentially costly issues alongside increases in taxes and the minimum wage. 

Although the Bill will not come in force until next year, and with the precise nature of the changes pending on the detail of the legislation – and any consequent impact on other parts of employment law – there’s no doubt that the measures being introduce will change how work is managed. There may be plenty of time for HR to prepare and understand what’s coming, but that’s not to say the function shouldn’t already be considering what they will need to do.

Unfair dismissal from day one

One of the most significant measures to be introduced by the government is the shift to day-one rights for unfair dismissal – a clear departure from the current requirement of two years of service. As Garvey Hanchard, partner at Bloomsbury Square Employment Law notes: “While this change aims to improve job security, it has drawn sharp criticism from business groups concerned about rising costs and reduced flexibility in hiring decisions.”

According to Hanchard the move has drawn reservations from many organisations representing employers and those involved in the recruitment process. The Federation of Small Businesses for example, estimates that day-one employment rights could cost UK businesses an additional £1.2 billion annually in legal fees, redundancy payouts, and administrative expenses. “Employers fear that these new protections could encourage an increase in employment tribunal claims, adding both financial and operational burdens,” explains Hanchard. And while there may be a positive impact on job security, Hanchard wonders if flexibility in employing people will also be compromised.

Cautious hiring or increased security

At the end of the day this move may make employers more cautious about hiring employees – especially those with less conventional backgrounds. Such hesitancy in turn could impact job creation, particularly in industries that rely on temporary or flexible labour.

On the flip side, however, this level of protection means workers can afford to feel more confident in their new position and may therefore be more committed and engaged in the workplace. Employers might actually see the benefit of the new arrangement as employees increase their engagement with a workplace and role they feel is reliable.

In addition it should be remembered that while day-one rights will exist the Bill will also provide employers with a Statutory Probation Period – expected to be between six and twelve months – which will still mean businesses can fairly assess their new hires before full Employment Rights apply. Despite everything, could this Bill actually present a more acceptable balance between the risk of employing someone and the opportunity for that person to bring real value to the organisation?

“Rather than resisting reform outright, businesses should focus on shaping the probationary framework to ensure it remains practical and fair,” advises Hanchard. “If implemented well, these changes could foster a more stable and productive job market, benefiting both employees and employers alike.”

Harassment prevention

Lydia Wawiye, Senior Associate, Employment Law Solicitor, Parfitt Cresswell highlights another aspect of the Employment Bill which stipulates that employers must take “all reasonable steps” to prevent harassment, noting that this now includes showing zero tolerance for such behaviour by third parties including customers and clients.

Direct discrimination, indirect discrimination, harassment (defined as ‘unwanted conduct’) and victimisation (you’ve made a complaint, and you can prove you’ve been punished for it) will now each be outlawed around ‘protected characteristics’ which are – and will continue to be – race, age, sex, disability, marital status, religion, pregnancy, gender reassignment and sexual orientation. 

Wawiye takes a positive view on the move: “The new law should make working life more comfortable for everyone, as it makes it illegal for your employer to accept, and not act, on discriminatory behaviour, whoever it comes from.”

There are several other elements of the Employment Rights Bill which will impact on HR to varying degrees, including family leave entitlements, flexible working rights, moves to address ‘hire and fire’ and, of course zero hours contracts.

Review, prepare, consult

“Although many of the Bill’s proposed changes are not due to take effect until late 2026, HR would do well to conduct a review of their existing policies as soon as possible to identify areas they need to update,” says Riaan Van Wyk, Senior Consultant at Barnett Waddingham. “In addition, they will need to implement training for HR personnel and managers to ensure understanding and compliance with any changes.”

Van Wyk also advises that where relevant, HR should engage with employee representatives early on to navigate changes in a collaborative way and follow a clear communication strategy when informing employees about their rights and workplace changes.

“The fact that several day-one rights are introduced might well mean a significant change in the employment experience and how workplaces are run,” he says. “Employers are likely to feel more exposed whilst employees would feel more protected, and it will be interesting to see how this change in dynamic plays out.”