The government has announced major changes to sick pay as part of the most wide-ranging overhaul of UK employment law in decades.
Since Labour's pledge to 'make work pay', parliament have been working though the detail of their proposed changes and published a roadmap on July 1st outlining some key dates as part of their phased approach.
The removal of both the three-day waiting period and the lower earnings limit will come into effect in April 2026 under the first stage of the Employment Rights Bill.
What changes have been announced for sick pay?
Currently, Statutory Sick Pay (SSP) is paid when an employee is sick for more than 3 days in a row (including non-working days), and only for employees earning at least £123 per week.
From April 2026, SSP will be payable from the first day of sickness absence and will apply to all employees, regardless of their level of earnings.
How can you get your business ready for the changes?
The changes to SSP are a fundamental change in employer obligations, and one that many businesses may not be ready for. Here are some of the things your business should do to prepare for the changes:
- Staff Handbooks and Employment Contracts
Review your staff handbooks and sickness policies to ensure that they are amended to reflect the new entitlements.
- Payroll Software
Take the time to check whether your payroll software can support these changes. If you outsource your payroll, make sure that your provider is prepared to accommodate these changes.
- Absence Management Procedures
Businesses without effective absence management procedures could see unplanned spikes in employees calling in sick. Implementing effective absence management procedures is proven to help reduce sickness absence.
- Complete a review of your forecasted staff costs
Potential increases in sick pay costs should form part of your forecasted staff costs.
It is so important to think ahead and consider how these reforms will affect your business. If you need help or advice, speak with our team today.
Author
Melanie O'Connor | ATT | CTA
Director
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