Over one million workers across the UK will benefit from major enhancements to Statutory Sick Pay (SSP) under the government’s Plan for Change, designed to boost the economy and improve living standards.
The UK government’s Employment Rights Bill proposes significant reforms to SSP, aiming to enhance employee welfare while also presenting new considerations for employers. It is key for businesses to stay informed and prepare for potential changes.
Key changes to SSP
- Lower earnings limit
Previously, to qualify for SSP, employees had to earn at least £123 per week. The proposed legislation removes this threshold, making SSP accessible to all employees, regardless of their earnings. For those earning below the former lower earnings limit, SSP would be calculated at 80% of their average weekly earnings or the current SSP rate, whichever is lower.
- Removal of the waiting period
Under the current system, SSP is payable from the fourth consecutive day of sickness absence. The proposed legislation removes this waiting period, meaning employees will be entitled to SSP from the first day of illness.
Predicted implications for employers
- Increased eligibility and costs
With more employees now qualifying for SSP, employers should anticipate an increase in short-term sickness absences, especially among lower-paid staff.
- Policy updates
When the legislation comes into effect, employers will have to update their sick pay and absence management policies to align with the new SSP framework. Payroll systems must also be adjusted to ensure correct calculations are made for those who previously fell within the lower earnings limit.
- Management training and absence management
It is essential for managers to be trained on these updated policies and to effectively manage short-term absences. Managers should continue to conduct return-to-work interviews with their staff after every absence.
A Balanced Approach for Businesses and Workers
Deputy Prime Minister Angela Rayner MP said:
“What we put into our workforce, we get back and more. This is a pro-worker, pro-business government – helping people stay in work, boosting productivity, and ensuring no one has to choose between their health and their livelihood.”
Employers should consider what steps will need to be taken to update policies, manage costs, and train staff accordingly. Despite the implications, this update provides greater financial support for low-income workers. The reforms encourage employees to take necessary sick leave rather than feeling compelled to work while unwell. This not only supports individual health but also helps create a healthier workplace by reducing the spread of illness and potentially enhancing overall productivity.
Secretary of State for Work and Pensions Liz Kendall MP added:
“No one should ever have to choose between staying home when sick or making ends meet. These landmark changes are good for workers, fair on businesses, and central to our plan to boost rights and Make Work Pay.”
The government is committed to continuing its programme of sick pay reform as part of its long-term ambition to build a more secure and productive economy for all.
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