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Book a demoGood processes are the backbone of any strong business. If you’re a small business owner just getting started, HR is one of your many responsibilities and a mistake can have serious consequences.
That’s where going through an HR compliance checklist can help your small business. With it, you’ll be able to understand what to do to comply with UK laws and regulations, covering your responsibilities as an employer and the rights of your team.
And come 2027, you’ll need it more than ever – major employment law changes are already underway, and now is the time to check you’re covered.
That’s where this guide can help. We’ll share our compliance checklist below, but you can also take our free quiz to get a score on your 2026/2027 employment law changes readiness.
HR compliance means abiding by the legal, ethical, and professional standards of human resources (HR) management.
And it’s more than just a legal requirement for businesses in the UK. HR compliance means creating a positive workplace that respects the dignity and rights of your employees.
It also covers legal aspects such as employment laws, health and safety regulations, and equality legislation. Beyond that, HR compliance takes into account ethical considerations like the fair treatment of your employees and creating a transparent workplace culture.
Even businesses that mean well can make honest honest mistakes. Here are some of the more common issues around HR compliance you’ll have to navigate:
Understanding these is the first step to creating a comprehensive HR strategy.
An HR audit is a routine check of your business’ HR processes and policies to ensure you’re staying compliant with UK employment regulations.
However, it can also be a strategic tool to position your organisation for HR success. An HR compliance checklist makes it much easier to undertake an HR audit.
A good HR compliance checklist (also known as an HR audit checklist) serves multiple purposes:
The main goal of an HR compliance checklist is to make sure your business is run according to UK employment law.
When you systematically and regularly review your HR policies, processes and practices through an audit, you spot potential problem areas and any risks of non-compliance (wage regulations or working hours, for example).
A well-run HR audit also assesses how well your HR systems are performing.
The audit evaluates your recruitment strategies, training programs, employee engagement, and other areas where you might refine your HR practices.
Using an HR compliance checklist for your audit ensures nothing is overlooked, so you can then improve your HR processes and align them with your business goals.
Importantly, you’ll also identify vulnerabilities in your HR processes (discrimination issues or data security risks, for example) with an audit, and be able to put preventative measures in place.
Knowing where your HR processes are lacking will help you create a stronger and more resilient company.
UK employment law can feel daunting for any small business, and it covers a lot of ground. Your checklist should include:
Contracts must include information like the job title, responsibilities of the role, working hours and salary. Getting them signed by both parties gives you clear evidence they were agreed. To make the process easier, you can use HR software with e-signatures, so contracts are signed and stored in one place.
And if your contracts and HR policies were written before 2026, be wary as they might already be out of date. Remember to refer to your disciplinary and grievance policies in every employee’s contract, and add a “non-contractual” mention in your handbook, so you can update policies without reissuing everyone’s contract.
All your other documents, such as salary change or contract change letter, should be safely stored and signed by your team members so you have written evidence if a claim is brought against you or the company.
Your employees have a right to earn a minimum wage. Ensuring you’re paying the National Minimum Wage and National Living Wage is crucial. Paying the correct rate for each employee’s age group is a legal requirement, and it helps maintain trust.
Your regular checks should monitor the working hours of your employees and check that they’re taking their mandatory breaks.
In the UK, the law on working hours and annual leave is known as the Working Time Regulations (WTR). These state that:
So it’s vital that you correctly calculate and document the holiday entitlement of every member of your team, and that includes part-time and variable-hour employees.
You must also now keep holiday and holiday pay records for 6 years.
Make sure you’re informing your employees of their rights around maternity, paternity, adoption, and shared parental leave. Their leave rights now start from day one.
You can build a paternity/maternity leave policy yourself, which can be part of your benefits package. Either way, your team members are entitled to at least Statutory Maternity Pay Leave, Statutory Paternity Pay Leave or Statutory Adoption Pay Leave.
Verifying that your employees have the legal right to work in the UK and having the documents to prove it is crucial. This is usually done by checking passports and asking for a share code to check their right to work on GOV.UK. This is also a requirement for freelancers and agencies your business works with.
Even if you’re small, aim to create an environment that promotes equality, diversity and inclusion. Anti-harassment and anti-discrimination policies should be at the heart of this environment.
The Equality Act 2010 sets out what counts as discrimination — refer to it to create a safe and welcoming workplace where everyone feels protected, heard, and seen.
From October 2026, you must take all reasonable steps to prevent sexual harassment at work, and you’re liable if a client or customer harasses your staff too. “We’re a nice team” isn’t a defence. To show you've taken reasonable steps:
Handling sensitive employee data according to GDPR guidelines is non-negotiable – you should ensure all your employee data (as well as all your company data) is stored on a secure platform. It’s tempting to store it all in a spreadsheet, but that puts it at risk of a data leak. Look for a platform that complies with UK GDPR (like Charlie) and find out more with our guide on data protection policy.
Whilst we can all agree that termination is never a fun topic, it’s also one you should keep even more of an eye on if you’re planning to use it. From 1 January 2027, anyone with 6 months’ service can claim unfair dismissal, with no cap on compensation. We recommend you list everyone who joined on or after 1 July 2026, as they’re all protected from 1 January and deal with any performance concerns now.
And remember following proper dismissal procedures, redundancy selection criteria, and redundancy consultation requirements is necessary to ensure you’re treating all of your employees fairly. We’d recommend getting professional advice before planning any redundancies.
Implementing and reviewing your safety practices is vital for a healthy work environment (don’t forget to have your health and safety policy). This includes conducting risk assessments and providing health and safety training for your team.
Enrolling your eligible employees and informing them of their rights regarding their pension is part of responsible financial planning and legal compliance for your business – find out how you enroll your small business into a pension scheme.
An employee handbook brings all your HR policies together so your employees can find them whenever they need to.
State that your handbook is “non-contractual” so you can update policies without reissuing everyone’s contract. A written disciplinary policy and procedure is legally required: follow the Acas Code, as ignoring it lets a tribunal add up to 25% to an award.
As an employer, you may need to work with trade unions that represent groups of your employees, and you’ll need to make sure you meet your legal obligations.
Send every employee, new and existing, a standalone statement on their right to join a union, and reissue it periodically. Bake it into onboarding. If you have fewer than 21 employees, unions can’t demand workplace access; above that, they can request it. Either way, workers are protected if they take part in lawful industrial action.
Create and communicate clear procedures for workplace disputes and grievances so conflicts are resolved fairly.
A written grievance policy is legally required. It should cover who to complain to, how fast you respond and how to appeal. Refer to it in every employee’s contract.
Following the proper legal procedures when an employee leaves your company (offboarding) is important for them and for you. This includes conducting an exit interview and returning all company property.
Charlie can also help with offboarding. Automated checklists ensure that nothing is missed, and gives your departing team member a professional exit.
Even if you don’t have your own sick pay policy, your team members are entitled to Statutory Sick Pay (SSP), which is now payable from their first day of sickness. They can self-certify for the first 7 days; after that, they’ll need a fit note from a GP or other healthcare professional.
Reports of sexual harassment now count as protected whistleblowing (now in force). Whistleblowers are protected from day one of employment, and compensation is uncapped. A whistleblowing policy isn’t technically required, but it’s cheap insurance: set out how people can raise concerns and who they go to.
From 1 January 2027, the qualifying period for unfair dismissal drops from 2 years to 6 months, and there’s no longer a cap on what a tribunal can award. Employees now have 6 months to bring a claim, so keep notes of difficult conversations for at least that long. Following the Acas Code on disciplinaries matters: ignore it and a tribunal can add up to 25% to the award.
Another item on your list? Change probation periods to 3 months, set clear goals and KPIs at onboarding, and put the review date in the diary on every new starter’s first day.
That must have been a lot to go through. HR compliance is a scary topic, especially when you don’t deal with it day-to-day.
As a small business, we’d recommend:
Sounds like a lot? Charlie Grow gives unlimited access to CIPD-qualified HR advisors who flag law changes before they bite and review your contracts for you. Find out more.
