How the Employment Rights Act 2025 Is Reshaping the Freelance Market

The Employment Rights Act 2025 introduces the most significant reforms to UK employment law in decades, with changes designed to strengthen worker protections, improve enforcement and raise standards across the labour market. While much of the focus has been on permanent employment, several of the Act’s core changes will have direct and indirect consequences for the freelance and contractor market.

Key changes include:

• Stronger unfair dismissal rights, with the qualifying period reduced to six months
• Day-one statutory sick pay and parental rights for eligible PAYE workers
• The creation of a new Fair Work Agency, bringing tighter enforcement of agency legislation, holiday pay and labour standards
• Regulation of umbrella companies, bringing them under formal statutory oversight
  Increased penalties for non-compliance across employment supply chains

Together, these changes raise the cost, risk and complexity of hiring permanent staff — while increasing scrutiny of how flexible labour is engaged.

Why Freelance Demand May Rise — At Least Initially

As businesses adjust to stronger employee protections and enforcement, many are expected to take a more cautious approach to permanent hiring. Industry commentators suggest that 2026 could see an uptick in freelance and contractor demand, as organisations look for flexibility, project-based expertise and reduced long-term risk.

For freelancers, this could mean:

• More short- to medium-term contract opportunities
• Increased demand for specialist skills
• Greater reliance on agency-led flexible hiring models

However, this shift is unlikely to be frictionless — or permanent.

Greater Opportunity Comes With Greater Scrutiny

The same legislation that may drive demand for freelancers also introduces tighter oversight of how contractors are engaged. With the Fair Work Agency overseeing agency compliance and umbrella companies now formally regulated, poorly structured or non-compliant engagement models will come under increased pressure.

Future consultations on employment status mean that freelancers working through unclear or high-risk arrangements may face greater uncertainty.

This creates a clear distinction in the market:

• Freelancers using informal or non-compliant setups may face disruption
• Those working with specialist, compliant recruitment partners will be better protected

Why Working With Frame 25 Makes a Difference

As the freelance market evolves under tighter regulation, how you engage becomes just as important as where you work.

Frame 25 has long supported freelancers and contractors across creative, broadcast and technology sectors with transparent, compliant engagement models. The changes introduced by the Employment Rights Act reinforce this approach:

• Clearer enforcement strengthens Frame 25’s commitment to ethical supply-chain practices
• PAYE and hybrid contractor models become more attractive with enhanced statutory protections
• Regulation of umbrellas aligns with Frame 25’s focus on trusted, compliant partners

Rather than reacting to legislative change, Frame 25 is already structured to support freelancers in a market where compliance, clarity and credibility matter more than ever.

A More Professional Freelance Market

While the Employment Rights Act may trigger a short-term increase in freelance hiring, its longer-term impact is likely to be a more professionalised and regulated flexible workforce.

For freelancers, success will increasingly depend on working with partners who understand both the market and the regulatory landscape. Frame 25 is committed to helping contractors navigate this shift — protecting the flexibility they value while supporting the security and transparency the new framework demands.