"Fair pay agreements" for adult social care staff will be negotiated following the passage of the Employment Rights Act 2025.
The legislation allows for the creation of adult social care negotiating bodies in England, Scotland and Wales, to set pay, terms and conditions for sector staff in each country.
The act will also improve access to statutory sick pay and provide rights to guaranteed hours for people on zero-hours contracts, including many home care staff.
Adult social care negotiating bodies
The act allows the relevant government to make regulations creating a negotiating body, which would have to have representation from unions representing social care staff and sector employers, though may also have other members.
Each body will negotiate terms and conditions for adult social care staff in their country under regulations drawn up by the government, setting out how they must operate and reach decisions.
Bodies will have to submit agreements to their government for ratification, with governments able to require bodies to reconsider any they were in disagreement with.
Agreements will be binding on adult social care employers in England and will need to be reflected in social care workers' contracts. They will be enforceable in the same way as minimum wage legislation is, with such enforcement being the function of a new Fair Work Agency.
Setting fair pay deals in England
The UK Department of Health and Social Care (DHSC) is consulting (until 16 January 2026) on the establishment of the negotiating body for England and how fair pay agreements should be managed.
It is planning to set up the body later this year, so that it can conduct its first set of negotiations in 2027, implementing the first fair pay agreement the following year.
It has proposed that negotiations take place annually and be based on a remit set by ministers, outlining any government priorities for that particular pay round, timescales and a cost "envelope" for the resulting agreement.
It said the envelope would be the maximum funding available to councils to cover increased costs, and that the negotiating body would need to ensure that its recommendations stayed within this limit.
£500m for first agreement 'barely scratches surface'
The DHSC has allocated £500m for councils to implement the first agreement in 2028-29, however, sector leaders have warned that this is deeply inadequate.
Think tank the Health Foundation has calculated that it would be worth about 20p per hour, if spent only on pay and divided evenly among England's roughly 1.6m adult social care workers.
The Homecare Association has warned that the sum "barely scratches the surface", in the context of its estimate that commissioners' domiciliary care fees were £1.6bn short of what was required in 2025-26.
Tackling 'exploitative' zero-hours contracts
The sector will also be significantly reshaped by the act's provisions to tackle "exploitative" zero-hours contracts - due for implementation in 2027 - given that 43% of domiciliary care workers in England were on such contracts as of March 2024.
Under the legislation, employers will have to offer guaranteed hours to staff on zero-hours contracts or on contracts under which they are offered a minimum number of hours. The guarantee should be based on the hours they actually worked over a preceding "reference period", likely to be 12 weeks.
The act also allows for the government to make regulations requiring employers to offer the guaranteed hours at regular times and also stipulates that employers must pay staff for shifts that are cancelled or rescheduled at short notice.
The Homecare Association has raised concerns that council and NHS commissioning practices will make it difficult for providers to implement these measures.
It has warned that the practice of commissioning small amounts of care from multiple providers makes it challenging for organisations to offer staff guaranteed hours. Also, it has found that commissioners often do not compensate providers for cancelled visits, leaving employers out of pocket when they pay staff for these.
Sick pay reforms
The act will also increase access to statutory sick pay (SSP) from April 2026. Under the changes, SSP - currently worth £118.75 per week - will be available from day one of a worker's sickness, not day four, as at present.
The act also removes the current requirement for staff to earn at least £125 per week to be eligible for SSP, with lower earners paid 80% of their normal weekly earnings when they fall sick.
Again, the Homecare Association has raised concerns about the measure, on the grounds that providers are not being funded to implement the change. A survey by the body last year found just 3% of home care providers offered staff more than SSP when they fell sick.
