This article was first published on LinkedIn - follow us there for regular tech insights: https://www.linkedin.com/company/trust-in-soda
The long-awaited overhaul of the Employment Rights Bill represents a generational shakeup of UK workplace legislation.
With over one million workers expected to gain more rights, the upcoming changes have been hailed by some as a positive turning point for the nation’s labour market.
At the same time, critics of the bill have labelled it ‘anti-business,’ warning that the reforms could increase costs and compliance pressure for employers.
So what does this mean for technology contractors: the developers, engineers, and digital specialists who power the UK’s innovation economy?
Trust in SODA explores how the reforms could reshape the contract tech market in the years ahead.
The Launch of the Fair Work Agency
At the centre of the Employment Rights Bill is the proposed Fair Work Agency, a single enforcement body expected to launch in April 2026, that would consolidate oversight of pay, working hours, and labour-supply compliance.
The FWA would simplify what is currently a fragmented enforcement landscape, bringing together functions that sit today with HMRC, the Gangmasters and Labour Abuse Authority, and other bodies.
For the tech sector, this creates a clearer baseline for what ethical, transparent contingent work looks like, which is particularly important in an industry built on trust, autonomy, and project-based collaboration.
- What this means for contract Recruitment: The FWA’s creation signals a continued move toward clearer, more transparent engagement models. Agencies and employers that can demonstrate digital auditability and responsible supplier partnerships will stand out. In a world of hybrid teams and distributed workforces, being able to evidence fairness and compliance through data could become a differentiator.
Umbrella Reform: Increased Accountability
Perhaps one of the most disruptive changes arrives in April 2026, when Umbrella Reform introduces joint and several liability for PAYE and NIC errors.
For the first time, end-clients and recruitment agencies will share tax responsibility for the actions of their umbrella partners.
This measure is designed to clean up a sector long criticised for opacity. Compliant, independently audited umbrella partners are expected to be best placed to thrive, and many agencies may take this as an opportunity to review and rationalise their supplier lists.
- What this means for contract recruitment: We may see some contraction in the umbrella market before 2026, as smaller providers struggle to meet the new compliance demands. Larger umbrellas with the infrastructure, governance, and auditing controls to satisfy tougher standards are expected to consolidate their position, often inheriting contractors from those exiting the market.
- For tech contractors, this could lead to a smaller but stronger ecosystem, one where compliance and credibility matter as much as technical skill. At the same time, IR35 determinations will continue to influence how digital talent is engaged. We may see more organisations explore Statement of Work (SOW) delivery models, particularly for software projects or data initiatives, where responsibility for delivery and compliance sits within the supply chain. When used well, SOW models can allow technologists to focus on outcomes rather than headcount, encouraging more flexible, innovation-led engagements.
The Employment Rights Bill Rollout
Rolling out across the next few years, the Employment Rights Bill introduces stronger day-one rights for workers, including protections for predictable hours and a broader definition of fair work.
It extends traditional employment safeguards into parts of the labour market that have historically sat on the margins (agency, casual, and zero-hours arrangements). For employers, this means compliance responsibilities once limited to permanent staff will increasingly apply to flexible work too.
- What this means for contract recruitment: While the reforms may encourage some organisations to review how they engage short-term talent, no single model is likely to dominate.
- In the tech industry, flexibility remains key, meaning that compliant umbrella arrangements, direct PAYE routes, and SOW contracting will likely coexist. For organisations, this is an opportunity to build more inclusive and transparent engagement practices, creating environments where freelancers and contractors are treated as true extensions of the team.
Employment Status Review
Expected in late 2025, the Employment Status Review could narrow the legal distance between worker and contractor, which could draw more engagements into PAYE. This would change how autonomy is evaluated, a subtle redefinition of who qualifies as being truly self-employed.
- What this means for contract hiring: Any changes to employment status rules are likely to evolve gradually rather than reshape the market overnight. Project-led and outcome-based roles should continue to sit comfortably within compliant frameworks when managed transparently.
- For digital specialists, understanding where each project sits on the spectrum between consultancy and employment will be the key. The more transparent both sides can be about expectations and deliverables, the more sustainable these flexible working relationships will become.
Key Dates to Watch
Trust in SODA’s View: Ethical Contracting as the Future of Tech Work
A strong compliance thread runs through the bulk of the upcoming reforms, with each measure appearing to push organisations toward more transparent and equitable employment models.
In the tech space, where many professionals already operate across hybrid and freelance setups, this marks a cultural shift as much as a regulatory one. At Trust in SODA, we see this as an opportunity for progress.
The future of tech contracting hinges on better partnerships, clearer expectations, and fairer systems that reward transparency and expertise.
The next two years will challenge organisations to balance agility with accountability. Those who get it right (combining inclusive hiring with solid governance) will not only stay compliant but also build stronger, more trusted networks of digital talent.
If you’d like to know more about how these reforms might affect your contractor community or future projects, our team would be happy to share what we’re seeing across the market.
To discuss what that could look like for your organisation, please get in touch with Trust in SODA’s specialist contract team directly: ryan.hill@trustinsoda.com.