Under government plans, over one million UK employees on the lowest earnings are to be entitled to 80% of their average weekly salary from the first day of sickness.
Current Sick Pay System
Currently, Statutory Sick Pay (SSP) is paid at a flat rate of £116.75 a week and is payable for each qualifying day (a day you’re normally scheduled to work) of sickness.
You’re paid SSP for each day you’re off sick, except for the first 3. This means that to qualify for SSP, you must have been ill for more than 3 consecutive days. Additionally, you must be an employee who has done work for your employer, and earn an average of at least £123 a week (known as the lower earnings limit). SSP is paid by your employer for up to 28 weeks.
You may also qualify for SSP if you have linked periods of sickness. The sickness must have lasted more than 3 consecutive days and be 8 weeks or less apart.
Proposed Changes
The change to sick pay forms part of a wider set of updates to the Employment Rights Bill, which was first introduced to Parliament in October 2024.
The changes set out in the bill are expected to be introduced as of next year. You can read the current version of the bill in full here.
When in force, the Employment Rights Bill will mean employees can claim SSP from the first day of sickness, and it will be extended to those earning less than £123 who are currently excluded from claiming SSP due to being below the lower earnings limit. There are currently between 1 and 1.3 million people earning below the lower earnings limit.
The lower earnings limit is to be scrapped, but it would be unfair to do this and still pay those lower earners the flat rate of SSP, as they would be earning more through sick pay than their normal earnings. This is why the government has proposed to work out SSP entitlement as a percentage of average weekly earnings or the current SSP rate, whichever is lower. The proposed percentage currently sits at 80%.
Under the current proposal, workers should therefore get either 80% of their average weekly earnings or the rate of SSP (whichever is lowest) from the first day of sickness. SSP is currently set at £116.75 a week and is set to increase to £188.75 per week from April.
Opinions…
“The current Statutory Sick Pay system fosters economic insecurity at work. Our commitment to remove the Lower Earnings Limit will ensure that all employees have access to Statutory Sick Pay and the peace of mind that this brings when they need to take time off work due to illness. No one should feel forced to struggle through work when they are too unwell to do so. By removing the waiting period and making Statutory Sick Pay available from day one, we are providing security to those who need it most.” – Alison McGovern, Minister for Employment
“While this policy marks a step in the right direction, it remains to be seen whether it will provide sufficient support for the lowest earners. The decision to grant 80% sick pay from day one will be a lifeline for many workers who previously faced financial hardship when falling ill. However, with ongoing concerns about the adequacy of statutory sick pay across the board, further improvements may still be needed to ensure fairness for all UK workers” – The Workers Union
“The upcoming Employment Rights Bill is also causing dread among the small business community, and in response to a separate FSB survey last year, 75 per cent of small employers highlighted fears relating to unfair dismissal changes, while 74 per cent raised concerns about changes to Statutory Sick Pay (SSP).
In fact, two thirds (67%) of small employers say the proposals in the Employment Rights Bill would make them curb hiring and one third (32%) plan to reduce the number of employees they have before the measures are introduced.” – Federation of Small Businesses
If you’re still finding the changes to sick pay confusing, there is any easy-to-understand guide here.