What is changing
Employees are currently eligible for statutory sick pay (SSP) if they are sick for a period of four days or more. Low-paid employees who earn less than the lower earnings limit are not eligible for SSP.
The Employment Rights Bill removes both these requirements:
- SSP will be available to employees from day one of their incapacity for work.
- All employees will be eligible, regardless of their earnings.
If an employee earns less than the weekly SSP rate (currently £118.75), they will be entitled to SSP at the rate of 80% of their normal weekly earnings.
Unlike most measures included in the Employment Rights Bill, the changes will apply in Northern Ireland, as well as England, Scotland and Wales.
Employers with no contractual sick pay will see the biggest impact
The change will have the most implications for employers that do not already provide contractual sick pay from the first day of illness.
These organisations should prepare for:
- a potential increase in sickness absence; and
- higher sick pay costs.
They will need to make sure their sickness absence policies and payroll systems are updated to reflect the new eligibility rules.
Training line managers on the effective management of short-term absence will help organisations to adapt smoothly to the new rules and keep any increase in absence to a minimum. Training should include how to monitor absence and how and when to carry out absence reviews.
Benefits of good absence management
Training for line managers should include recognition of the benefits that extended sick pay can bring to the organisation. For example, employees feeling less financial pressure to come to work while sick can lead to:
- faster recovery from illness;
- increased productivity;
- higher engagement; and
- reduced transmission of sickness in the workplace.
Employers that already provide day-one sick pay may also be affected
There will also be potential implications for employers with existing day-one sick pay provision. These employers may find that their sick pay policies no longer represent an attractive differentiating feature to potential and current employees. Organisations that wish to stand out as an employer of choice may need to reconsider their benefits offering.
Did you know?
Our research shows that employers in the manufacturing-and-production sector are far more likely to be concerned about statutory sick pay being payable from day one than those in other sectors. Public services organisations are the least concerned about changes to sick pay (Brightmine Employment Rights Bill research 2024).
There will be new enforcement powers
The new Fair Work Agency (FWA), which is established under the Employment Rights Bill, will have powers to enforce the payment of SSP. The FWA will be able to require employers to pay a penalty in addition to the unpaid SSP. Currently, it is down to employees to bring an employment tribunal claim if they are not paid the correct SSP.
What happens next?
In its roadmap for implementing the Employment Rights Bill, the Government confirmed that the changes to SSP eligibility will come into force in April 2026. The exact date is not yet known.
The Government’s rationale
“Statutory Sick Pay provides a minimum level of support when employees need to take time off work due to sickness. By removing the Lower Earnings Limit as an entitlement condition for Statutory Sick Pay, the government is delivering on the manifesto commitment to ensure that the safety net of sick pay is available to those who need it most. All eligible employees will have access to SSP and the peace of mind that this brings, irrespective of their income. Businesses will benefit from having employees who feel supported by their employers, helping to reduce presenteeism and increase productivity and staff retention.”
Source: Government consultation response – Making Work Pay: Strengthening Statutory Sick Pay.
