Forthcoming changes to statutory sick pay

Many SMEs pay statutory sick pay (SSP) only during sickness absence, and there are some key changes that are going to be made by the government to the SSP regime. The Employment Rights Bill, which is currently before Parliament, contains provisions that will:

• remove the three “waiting days” for SSP, so that it will then become payable from the first day of sickness absence - this means that employees who take regular odd days of sickness absence for minor illnesses will then be entitled to SSP for those days, whereas currently they receive no pay for those days (unless there’s a contractual sick pay scheme in place or you otherwise exercise your discretion to pay them)
• remove the lower earnings limit for qualifying for SSP - once this happens, employees will receive either 80% of their average weekly earnings or the SSP flat rate, whichever is lower, meaning that all employees will then be entitled to SSP, albeit at a lower rate for low-paid workers.

Once these changes take effect, your SSP costs will increase, and your sickness absence rate may go up too, at least in respect of odd days for minor illnesses. There’s also no mechanism in place for you to claim SSP back from the government like there is for other statutory payments, such as statutory maternity pay.

The Employment Rights Bill is expected to receive Royal Assent before the Parliamentary summer recess in late July 2025. It’s not yet known when these changes to SSP will then come into force, but it’s unlikely to be before April 2026