What does Employment Rights Bill mean for Landlords and Letting Agents

Employment Shake-Up: What Letting Agents and Landlords 

Must Know About Rayner’s Employment Rights Bill and NI Cuts

A double dose of disruption is coming for the UK’s residential property sector: on one hand, Angela Rayner’s proposed Employment Rights Bill promises the biggest overhaul of workplace laws in decades. On the other, the government’s recent National Insurance cuts appear to offer some relief for employers — but only on paper.

For letting agents and landlords who employ staff, cleaners, maintenance teams or even occasional admin cover, this new regulatory landscape is a mixed bag. Rising employment obligations may collide with marginal savings in employer NICs, leaving many questioning how viable flexible hiring models will remain.

Rayner’s Bill: The Key Headlines for PRS Operators

Angela Rayner’s bill, still moving through the House of Lords, proposes sweeping worker protections, including:

• Abolishing zero-hours contracts
• Granting unfair dismissal and sick pay rights from day one
• New redundancy thresholds
• Increased union strike powers
• Mandatory flexible working considerations

At face value, these are designed to protect employees — but for small agencies and landlords, they mean higher costs, greater legal risk, and more red tape.

Meanwhile: NIC Cuts — Helpful or Hollow?

Chancellor Rachel Reeves’ latest National Insurance changes, effective from April 2025, reduce:

• Class 1 employee NICs by 2p (down from 10% to 8%)
• Self-employed Class 4 NICs to 6%
• Employer NICs threshold remains frozen

While these cuts help workers and sole traders slightly, employer NICs — the 13.8% tax on staff salaries above £9,100/year — are untouched.

This means:

• Letting agents and landlords with employees won’t see a direct reduction in employment tax costs
• Rising wage expectations, plus new statutory entitlements (like day-one sick pay), may more than cancel out any perceived relief
• Contractors shifting from self-employed to employed status (because of Rayner’s Bill) may increase your NIC exposure significantly

The Cumulative Effect: Squeezed Margins and Shrinking Flexibility

Taken together, the expansion of employment rights and the limited scope of NIC cuts create a high-stakes scenario for PRS professionals:

The bottom line? The letting industry is under pressure to formalise employment practices without equivalent tax relief — a tough ask in a margin-sensitive sector.

Action Plan — How Letting Agents and Landlords Can Prepare for Employment Reform and Rising Staff Costs

The Employment Rights Bill, paired with the stagnant employer NIC threshold, will make it riskier — and pricier — to hire. That doesn’t mean you must stop hiring, but it does mean you must hire smarter.

Key Risks and Responses for Letting Agencies and Landlords

1. Casual Hiring Will Require Contracts and Contingencies

Risk: Banning zero-hours contracts removes a key option for short-notice cover, weekend viewings, or seasonal staff.

Response:

• Shift to minimum-hour contracts with flexible add-ons
• Build an on-call rota of staff willing to work variable hours under clear terms
• Reclassify freelancers and make sure they’re truly self-employed under HMRC rules

2. Increased Tribunal Risk From Day-One Rights

Risk: Unfair dismissal claims could arise immediately, even for poor fit hires.

Response:

• Use robust onboarding procedures (clear job roles, documented training, performance logs)
• Consult an HR adviser before terminating any employee
• Review your legal insurance and tribunal cost cover

3. Redundancy Process Redefined

Risk: Redundancy consultation could be required across a business — not just by location.

Response:

• Map your workforce to understand when thresholds apply (especially in multi-branch agencies)
• Document the business case for redundancies and follow a fair consultation process

4. Statutory Leave and Sick Pay Costs Upfront

Risk: Immediate sick pay and parental leave entitlements from day one increase operational costs.

Response:

• Budget for higher staff absence costs
• Encourage staff to notify early and track leave usage closely
• Use absence management tools and return-to-work interviews to manage patterns

5. Employers Still Bear the NIC Burden

Risk: Employer NICs are frozen — no change to the 13.8% rate or threshold.

Response:

• Consider payroll reviews to optimise salary structures
• If expanding, model your staffing costs including full employer NIC liability
• Explore software or accountants that help optimise small business employment tax planning

Landlord Considerations

Landlords directly employing cleaners, caretakers, or site staff will also need to:

• Issue formal contracts
• Pay employer NICs (if earning over threshold)
• Prepare for the risk of sick leave, tribunal claims, and redundancy procedures

Tip: If you’ve avoided payroll until now, it may be time to formalise — or shift to using properly contracted service providers.

Final Thoughts: Prepare Early, Don’t Panic

Angela Rayner’s Bill is not yet law, and the NIC changes offer limited relief — but the direction of travel is clear: hiring is becoming more regulated, more formal, and potentially more costly.

Next Steps for Agents and Landlords

✅ Audit all current employment arrangements — even informal
✅ Review your use of contractors and freelancers
✅ Talk to your accountant about NIC forecasting
✅ Join an industry body for timely compliance guidance
✅ Train your team leads to manage new leave and tribunal risks

With planning and good advice, letting agents and landlords can stay compliant and competitive. But ignoring these changes could mean costly legal trouble or unsustainable staffing costs in the years ahead.