Sexual harassment duty for small firms (2026)

From 30 October 2026 the duty in section 40A of the Equality Act 2010 becomes a duty to take "all reasonable steps" to prevent sexual harassment of employees, and employers become liable for harassment of their staff by third parties such as customers unless they took all reasonable steps (Employment Rights Act 2025 ss.20–21; S.I. 2026/1065). There is no small-employer exemption. A tribunal can already raise compensation by up to 25% where the preventative duty is breached. For a small firm, a risk assessment, a clear policy, short training and a reporting route that bypasses the manager are the core steps.

Since 26 October 2024 every employer has had a duty to take reasonable steps to prevent sexual harassment of its employees. On 30 October 2026 two changes in the Employment Rights Act 2025 make that duty heavier, and they apply to a five-person café exactly as they apply to a supermarket.

What changes on 30 October 2026

“All” reasonable steps. Section 20 inserts one word into section 40A(1) of the Equality Act 2010: employers must take “all reasonable steps” to prevent sexual harassment of employees in the course of their employment. It matches the wording of the defence employers already rely on when sued for harassment by a colleague, so “we did some things” is no longer enough.

Third-party harassment. Section 21 makes employers liable for harassment of their employees by third parties — customers, clients, patients, contractors, suppliers — unless they took all reasonable steps to prevent it. For hospitality, retail, care and trades working in people’s homes, this is the bigger change.

A power to define reasonable steps. Section 22 lets ministers set out, in regulations, steps that are to be treated as reasonable. None had been made by 25 October 2026.

Both duties were brought into force by S.I. 2026/1065, made on 1 October 2026.

What is already law

The Worker Protection (Amendment of Equality Act 2010) Act 2023 created the preventative duty from 26 October 2024. If a tribunal upholds a sexual harassment claim and finds the employer breached the duty, it can increase compensation by up to 25% (section 124A). The Equality and Human Rights Commission can enforce the duty even when no harassment has happened.

What “reasonable” means for a small firm

The EHRC’s technical guidance says there is no fixed list of steps; what is reasonable depends on the employer’s size, resources and the risks in its work. It also says an employer is unlikely to comply without a risk assessment, and should not wait for a complaint before acting.

For a business with under 50 staff, a proportionate set of steps looks like this:

Step What it looks like in a small firm Time
Risk assessment One page: where, when and by whom harassment could happen, and what you will do about each 1–2 hours
Policy Two pages covering colleagues and third parties, reporting routes, investigation and outcomes 2–3 hours
Reporting route A named second person, or an external contact, for when the problem is the manager 30 minutes
Training A short session for everyone, with examples from your own work; record attendance 1 hour
Customer-facing measures A line in terms, a notice, a rule on refusing service, a buddy system for late shifts Varies
Review Revisit after any report and at least once a year 1 hour

None of this needs a consultant. It does need to be written down and dated, so you can show what you did.

Third parties: practical steps

  • Tell customers, in writing where you can, that harassment of staff is not tolerated and what will happen.
  • Decide in advance what staff can do — refuse service, end a visit, call a manager — and back them when they do it.
  • Pair up or check in on staff working alone or late, or in customers’ homes.
  • Log every report, including ones that seem minor, and what you did about it.

Example risk assessment entries

A risk assessment for a small business can be a simple table. Three illustrative rows for a restaurant:

Risk Who What we will do Owner By
Customers harassing waiting staff late at night Front-of-house, especially under-21s Duty manager on every late shift; staff can refuse service; incidents logged Owner 30 Oct 2026
Staff socials with alcohol Everyone Clear standards before events; a named person to report to on the night Owner Before Christmas party
Delivery drivers’ messages to staff Kitchen staff Drivers contact the manager’s phone only; report route for messages Manager 30 Oct 2026

Handling a report

When someone reports harassment — by a colleague or a customer — a proportionate process for a small firm is:

  1. Listen and record. Write down what was said, when and by whom, with dates. Ask what the person wants to happen.
  2. Protect. Separate shifts, change who serves a customer, or ban a customer while you look into it. Make sure the person who reported is not disadvantaged.
  3. Investigate promptly. Speak to the people involved and any witnesses, and keep notes. If the alleged harasser is the owner or the only manager, bring in someone independent.
  4. Decide and act. Apply your disciplinary procedure for staff; for customers, apply the consequences you set out in advance.
  5. Follow up. Check in with the person who reported, and update the risk assessment.

Acas has guidance on handling complaints and running investigations that a small firm can follow without specialist help.

How this connects to other changes

  • Whistleblowing (since 6 April 2026). A report that sexual harassment has happened or is likely can be a protected disclosure. Dismissing someone mainly for making one is automatically unfair from day one.
  • Tribunal time limits (since 1 October 2026). Most claims now have six months instead of three.
  • NDAs (planned 2027). Clauses that stop staff speaking about harassment are set to become void.

Checklist

  1. Risk assessment written and dated.
  2. Anti-harassment policy covering third parties, shared with staff.
  3. A reporting route that does not depend on one manager.
  4. Training delivered and recorded.
  5. Customer-facing measures in place where staff deal with the public.
  6. Review date in the diary.

The business plan tab includes these documents with a review-by date of 2 October 2026 — four weeks before the duty starts — and can export reminders to your calendar. For the wider picture see the Employment Rights Act 2025 timeline.

Sexual harassment duty for small firms (2026): step by step

  1. Assess the risks. Write down where harassment could happen in your business — lone or late working, alcohol, customer contact, home visits, online messages — and who is most exposed.
  2. Write a short policy. Cover colleagues and third parties, explain how to report, who investigates and what happens next.
  3. Give a reporting route that bypasses the manager. In a small firm the harasser may be the boss; name a second person or an outside contact.
  4. Train everyone. Keep it short and specific to your workplace, and record who attended and when.
  5. Act on reports and review. Investigate promptly, record what you did, and review the risk assessment at least once a year or after an incident.

Frequently asked questions

Does the duty apply to a business with five staff?

Yes. There is no exemption by size. What counts as reasonable takes account of the size and resources of the employer, so a small firm's steps can be simpler — but it must still take every step that is reasonable for it.

Can an employee sue just because we had no policy?

Not for breach of the preventative duty on its own. But if harassment happens and a claim succeeds, a tribunal can increase compensation by up to 25% for breach of the duty, and the EHRC can take enforcement action without any incident having happened.

What if a customer harasses a member of staff?

From 30 October 2026 you can be liable for that harassment unless you took all reasonable steps to prevent it. Steps include telling customers harassment is not tolerated, giving staff a way to report it and acting when it is reported.

Will the government list the steps we must take?

Section 22 gives ministers a power to set out steps that count as reasonable. No regulations had been made under it by 25 October 2026.

Sources

  1. Employment Rights Act 2025, section 20
  2. Employment Rights Act 2025, section 21 (harassment by third parties)
  3. Employment Rights Act 2025, section 22 (power to define reasonable steps)
  4. S.I. 2026/1065 — Commencement No. 6 (made 1 October 2026)
  5. Worker Protection (Amendment of Equality Act 2010) Act 2023
  6. EHRC — Sexual harassment and harassment at work technical guidance
  7. Acas — Employment Rights Act 2025
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