Amongst all the talk about the big changes to the employment law landscape over the last few months, the potential impact of a seemingly small change to how statutory sick pay (SSP) will operate going forward has the potential to slip under the radar for many employers.
From 6 April 2026 (yes, that’s in 2 weeks’ time!), employees no longer have to have 3 days off sick before being eligible for SSP, known as ‘waiting days’ (check your contracts/handbooks, they may still say SSP is payable from the 4th day of absence). Instead, they will get their SSP from day 1 of their sickness absence. This means employees will be eligible for full SSP for short one to three day absences as well.
Coupled with the removal of the waiting days, the reforms mean that there will also no longer be a lower earnings limit. Currently, you have to earn at least £125 per week to qualify for SSP.
A recent ACAS survey on how employers feel about the changes brought about by the new Employment Rights Act 2025 (ERA) highlights the issue of sick pay changes, with 43% of employers saying that workers getting sick pay for the first day of illness, rather than the fourth day, would have the biggest impact on them.
The rationale?
According to the Government, it will reduce “presenteeism” (e.g. employees showing up to work with a horrible cold that no one else wants to catch, to avoid missing out on receiving any pay for that day). The opposing conclusion and cynical view is that some employees, particularly those who are lower-paid, might be much more tempted than ever to have that duvet day after a heavy weekend, to take that sunny Friday off to enjoy a long weekend, or to use sickness absence as a tool in managing childcare, rather than use unpaid parental leave or use up their holiday entitlement.
From 6 April, the new rate for SSP will be £123.25 per week, or 80% of normal weekly earnings (whichever is lower). Approximately 25% of businesses offer SSP only when an employee is off sick. That suggests that a quarter of those employers reading this will need to consider/make changes immediately. The rest of employers who may offer contractual sick pay in the first instance, will need to think about what happens when the employee switches to SSP once contractual sick pay is exhausted. So they’ll all have changes to make, too.
The area which we expect to cause the biggest headache for employers is calculating SSP for atypical employees, such as those with zero-hours, term-time/seasonal hours, irregular hours and agency workers. These employees might have dipped below the lower earnings threshold previously but will now be eligible to be paid if they can’t come to work. Employers will need to work out 80% of the normal weekly earnings for these employees, and pay these employees that amount, or the new rate of £123.25 per week, when they are off sick. This will require an averaging exercise each time the employee takes a sick day (unless the employer makes a commercial decision to pay at the new rate, regardless of average earnings, for each sick day).
Moreover, and to limit paying out on days where the employee might not normally be in work anyway, employers will need to make sure that qualifying days (the days that SSP are paid for, if someone is off sick) for SSP are clearly set out in the contracts of atypical employees.
The upshot?
Nearly every employer will need to update their contracts and/or handbooks to ensure they reflect the changes to SSP. Payroll systems will need to be updated to calculate the 80% for employees where this is relevant, and to reflect the new day 1 entitlement.
Naturally, some businesses (or specific areas of a business) will be impacted by the changes more than others. Mapping out how the changes will affect you (to allow for accurate budgeting for the inevitable increase in SSP payments) will be an important job for HR departments over the coming weeks. Managers across all businesses will need to be alerted to, and trained on, the new regime, and thought should be given as to how the change is communicated to employees.
Perhaps most importantly (and noting the potential for the new regime to increase one-off sick days), structured return to work plans (even for short-term absences) and sickness management procedures for intermittent short-term absences will be even more crucial, should you need to rely on them.
We can help you with all of this.
How can we help?
Our employment lawyers and HR experts are on hand to advise on any bespoke or unexpected consequences resulting from the changes to SSP and to make sure you’re ready for the next raft of changes flowing from the ERA, which are due in October.
