Statutory Sick Pay changes

Proposed changes to Statutory Sick Pay (SSP) will introduce entitlement from the first day of sickness, with the lower earnings threshold removed.

The changes are part of the Employment Rights Bill, currently progressing through parliament. While the new rules are not expected to take effect until autumn 2025, at the earliest, employers should start revising their policies to be ready.

Unlike other statutory payments, SPP is not recoverable from HMRC. Therefore, the cost is fully borne by employers.

Day one right

Employees are not currently entitled to SSP until the fourth day of absence. This three-day waiting period is to be removed, so an employee will be entitled to receive SSP from day one of sickness. This will mean:

• Many employees will no longer have to choose between going to work when unwell or not getting paid.
• However, employers could be impacted by increased absences and a loss of productivity.
• Employers will also face an extra cost. Under the existing rules, an employee on a week’s sick leave receives SSP of £47.50. The amount payable under the new rules will be £118.75 (the weekly amount of SSP for 2025/26).

Employers could see a rise in sick leave abuse, which will require careful handling. Approaches to reducing abuse include asking employees to check in regularly when off sick, and holding return-to-work interviews.

Lower earning threshold

To qualify for SSP, there is currently an earnings threshold of £125 per week. When this threshold is removed, employees off sick will receive the lower rate of SSP and 80% of their average weekly earnings. Although a small number of employees will receive less SSP per day as a result of this change (those earning between £125 and £148), they will benefit from more qualifying days.

The Government’s factsheet on the removal of the lower earnings threshold can be found here.

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