There are two major changes being brought in by the Employment Rights Bill (ERB) in respect of Statutory Sick Pay (SSP), which are expected to come into force in April 2026 (although that is to be confirmed). 

What is the current policy for payment of SSP?

To be eligible for SSP, an individual must be:

·       Classed as an eligible employee

·       Have average weekly earnings at or above the Lower Earnings Limit (currently £123 per week). 

Eligible employees are only paid from their fourth working day of sickness absence.

What are the two major changes proposed in the ERB?

1.     Lower earnings threshold removed

SSP is currently paid at a prescribed weekly rate (from 6^th April 2025, it is £118.75).  It is proposed that employees will be paid at the lower of the prescribed weekly rate and “the prescribed percentage of the employee’s normal weekly earnings”, which has been set at 80%.  This means that employees who currently do not qualify for SSP because they do not earn above the lower earnings threshold will do so. 

Example: Jack, who works one shift a week earning £100 and could not come into work through sickness.  He doesn’t qualify for SSP as he earns less than £123 per week, but with the ERB changes, he will now be entitled to receive 80% of his normal weekly earnings (subject to a cap of £118.75) and so £80 for each shift he can’t work through sickness.

2.     Removal of 3-day waiting period

Employees are currently only entitled to receive SSP on the 4^th day of sickness and not for the previous 3 days (known as waiting days).  The new changes will mean that employees will be entitled to SSP from the first sick day.  There is currently no indication to suggest that this will be subject to a cap, meaning that short-term absenteeism rates may rise. 

Example: Jill, who has been ill with the flu for three days, does not qualify for SSP as she came back into work on the fourth day as she could not afford the time off.  With the ERB changes, she is now able to be paid SSP for those three days.

What do these changes mean for my business?

Although the changes aren’t coming into force just yet, it is a good idea to think about what changes you need to make for your policies and procedures now so that you are fully prepared when the time comes. So, what should you do now:

·       Review your sickness policies and contracts in due course to reflect that SSP will be paid to employees on the first day of sickness absence, at the lower of the prescribed weekly rate and “the prescribed percentage of the employee’s normal weekly earnings”, which has been set at 80%;

·       Think about whether you will change your procedures for sickness absence, including the time and day employees need to notify you of absence; changes to how they notify you (self-certification may no longer be appropriate); who they will need to notify etc;

·       Ensure you have procedures in place to monitor sickness absence levels;

·       Take a look at your capability and disciplinary policies and procedures and think about amendments that may need to be made to deal with regular short-term absenteeism;

·       Consider the financial implications of the changes to your business and bear in mind the other proposals made by the ERB to the fire and re-hire principles (please see our updates on that HERE);

·       Consider whether your policy on Company sick pay needs to be amended to reflect that SSP is paid from day 1 (being mindful of the proposals made by the ERB to automatic unfair dismissal rules), and whether it is still compliant;

·       Train managers and other staff in short-term sickness absence procedures, your capability procedures and medical referrals. 

For a helpful guide published by the Department for Work & Pensions, please see:

https://assets.publishing.service.gov.uk/media/67125b5cb40d67191077b384/statutory-sick-pay.pdf

We are happy to assist with any other questions you might have. For more information please contact Kim Knox on KKnox@ortolan.com