Next year brings in a raft of new employee laws and regulations that will directly impact agencies. Founders and HR leaders need to take proactive action to prepare for significant changes across a number of legal areas, some crucially aimed at marketing and consumer protection, writes Rebecca Kelly, lawyer and co-founder of Leeds-based legal document platform shizl.
Key areas of focus will include corporate transparency, substantial employment law reforms, and evolving technology regulations.
As a commercial lawyer, I have experience of many business founders coming to me with legal issues that can cost them dearly if they don’t have the correct legal documentation to hand.
The agency community will need to ensure their documents are updated and meet the demands 2026 will bring. Here I outline what legislation is coming, why it matters, and what steps you should take. I strongly encourage agency founders to ensure their employment contracts are compliant, and their data and security policies are updated and robust to make 2026 and beyond, as smooth as possible.
Companies House verification: action required now
What Companies House verification means for agency founders
All company directors, persons with significant control (PSCs), and those who file documents on behalf of the company must verify their identity.
This process requires key personnel to provide official identity documents and proof of address either to an authorised Corporate Service Provider or directly to Companies House. While this means additional administrative requirements and potential costs, it is a vital step intended to prevent fraud, money laundering and increase transparency across UK organisations.
Enhanced digital filing and compliance requirements in 2026
Companies House will soon mandate enhanced digital filing and stronger authentication methods, accepting virtually all submissions via improved digital systems. There will be a greater emphasis on ensuring filed information is accurate and up-to-date, and Companies House will gain more powers to query or reject inaccurate filings.
Mandatory verification, stricter deadlines, and greater transparency will provide more detailed public information about your business and its ownership structure.
Key employment law changes for founders: April 2026 onwards
Founders must be aware of several new employment law changes taking effect in 2026:
- Statutory Sick Pay (SSP) reforms: The lower earnings limit will be removed, making SSP available to more low-paid employees. Additionally, the three-day waiting period for payment will be removed.
- Paternity leave rights: Paid Paternity Leave will also be available from day one of employment.
- Stronger anti-harassment duties: Business owners will be required to take reasonable steps to prevent sexual harassment of employees, which includes harassment by customers or clients. Employers who fail to comply may face compensation penalties.
- Restrictions on ‘Fire and Rehire’: There will be restrictions on the practice of dismissing employees and then re-engaging them on worse terms.
- Unfair dismissal claims: The time limit for employees to bring unfair dismissal claims will be extended from three months to six months.
The consequences for failing to meet these responsibilities could result in financial penalties that significantly damage your business in the form of employment tribunal costs, reputational damage and management time administering employee claims. Ensure you know exactly what is required of you.
Global technology issues affecting businesses
In 2026, businesses will face increasing responsibility for how their technology impacts individuals and society.
- Data protection: We can expect greater GDPR enforcement and potential UK-specific divergence, with an increased focus on compliant international data transfers.
- Emerging AI regulation: Regulation is emerging for Artificial Intelligence, demanding greater transparency and accountability. This will necessitate the development of AI governance frameworks and clear ethical guidelines.
- Cybersecurity: There will be increased regulatory requirements for cyber resilience and growing liability for companies following data breaches. In addition, businesses are more alive to cyber security risks and this will result in greater scrutiny of security measures when entering into supply contracts, particularly tech based contracts.
- AI governance: 2026 will see the emergence of sector-specific AI rules and the requirement for human oversight of automated decision-making.
- Consumer protection:
- Subscription-based businesses will have to be clearer in their cancellation processes and must send reminders about renewals, providing easier opt-out options for consumers.
- There will be a ban on fake reviews for products and services, including the prohibition of commissioning, hosting, or publishing them.
Agency founders are facing a new raft of compliance demands and potential penalties.
Getting your legal documentation in order
From now and over the next six months, founders should focus on getting their ‘house in order’ by overhauling their legal documentation. Understanding what is legally demanded of you is paramount. To be forewarned is to be forearmed!
