Changes to the statutory sick pay regime being introduced by the Employment Rights Act 2025 have received less attention than some of its more headline-grabbing proposals. Nonetheless, they are significant – and will have a significant impact on employers’ bottom line.

From April 2026, more employees will qualify for statutory sick pay with the removal of the requirement that they earn more than the lower earnings limit. And those employees will have a bigger entitlement, as statutory sick pay will be payable for any day of absence, provided other conditions are met, not just extended periods. Statutory sick pay is a UK-wide entitlement, so these changes will affect businesses in Scotland and Northern Ireland, as well as England and Wales.

Current statutory sick pay regime

Statutory sick pay (SSP) is a byzantine scheme, with numerous qualifying conditions and exceptions. It is not payable from the first day of sickness absence and is not paid at the employee’s normal rate of pay. The right is set out in Part XI Social Security Contributions and Benefits Act 1992 and also governed by the Statutory Sick Pay (General) Regulations 1982. HMRC has a Statutory Payments Manual which is available on the Government website which contains detailed guidance.

Necessary conditions to receive SSP are that:

  • The individual must be an employee or a worker liable to pay Class 1 NICs.
  • The employee must have commenced work. There is no entitlement if the employee has not yet done any work for the employer.
  • The employee must be incapacitated or convalescent or advised to refrain from work.
  • The employee must have been incapable of work for at least four calendar days in a row (a ‘period of incapacity for work’) These may be non-working days, such as Saturday or Sunday. If periods of incapacity for work are separated by a gap of eight weeks or less, they link and are treated as one. But the second period must also be at least four days, odd days of absence will not be linked.
  • The employee must have average weekly earnings of not less than the lower earnings limit for NIC purposes for the eight weeks prior to sickness (currently £125 per week).
  • The employee must tell the employer that they are sick and unable to come to work and must provide evidence.
  • SSP is only payable on ‘qualifying days’. These are days the employer and employee have agreed the employee is required to work. There are further rules about how these days are determined if there is no agreement.
  • SSP is not paid for the first 3 qualifying days in any period of incapacity for work – which are called waiting days.
  • Entitlement must not be exhausted. This occurs after 28 weeks or if a series of linked periods of incapacity for work lasts for more than three years (even if total SSP paid is less than the maximum payable). Once the link is broken by a gap between periods of incapacity for work of at least 57 days, a fresh period of incapacity for work can start with a new maximum entitlement.

SSP is paid at a flat weekly rate which increases in April every year. This will be £123.25 from 6 April 2026.

Employers cannot avoid paying SSP by dismissing the employee if they do so solely or mainly to avoid liability for SSP. If they do, the employee’s entitlement will continue until ended for another reason (e.g. the employee has recovered or their entitlement is exhausted).

Historically small employers had a right to recover some SSP from HMRC. This right ended in April 2014. Employer’s SSP costs will soon increase significantly, when the SSP regime is changed this April.

New SSP regime from April 2026

From 6 April 2026, there will no longer be any ‘waiting days’ before the employee is entitled to SSP and it will be payable from the first day of incapacity for work.

Additionally, the lower earnings limit will be removed, making all employees eligible for SSP. For some lower earners their rate of SSP will be calculated as a percentage of their earnings. The amount paid will be the lower of the prescribed weekly rate and 80 per cent of the employee’s normal weekly earnings.

These changes mean that employers will have to pay SSP for odd days off sick, rather than only paying it for more extended absences.

The government calculates that removing the lower earnings limit would enable 1.3 million people to access SSP who currently have no entitlement. In parliamentary debates, it also noted that it will affect phased returns to work after a lengthy absence. If a full-time employee who has been off sick for a period returns initially on Mondays, Wednesdays and Fridays, SSP will be payable on the other two days’ absence. This contrasts with the current position where such an employee would not meet the conditions around periods of incapacity for work (for which you must be incapacitated for four consecutive days).

Many employers restrict contractual sick pay until employees have successfully completed their probationary period but they will not be able to refuse to pay SSP.

Some employers also rely on the fact that SSP is not payable until the fourth day in an absence period to deter odd days of absence for relatively minor illnesses. This deterrent effect will no longer be provided by the SSP regime and one of the things employers should now consider is how to encourage attendance.

The changes will particularly impact employers with large, low-paid workforces which do not have a contractual right to sick pay.

What should employers do now?

You should review your sickness absence policies and procedures now, ready for the change, and prepare to remove references that will no longer be correct (e.g. references to waiting days and to the necessity to be earning above the lower earnings limit).

If company sick pay is genuinely non contractual, there may be scope to reduce payments that are more generous than SSP, in order to compensate for the increased costs of SSP. But be careful that a right to sick pay has not become implied into the contract by custom and practice.

You should ensure you have trained managers in dealing with sickness absences. Managing sickness absence may make managers feel uncomfortable and they may therefore be tempted to delay dealing with it. A good record of absences should be kept and managers should be particularly alert to patterns that might indicate dishonesty, such as a pattern of single day absences on Mondays and Fridays.

Do you need to tighten up how you deal with excessive sickness absence? You may want to implement return to work interviews and discussions with employees about how they can improve their attendance.

Employers should think about what their trigger points will be for issuing warnings.

Employers must get to grips with the arcane rules governing SSP, so that they know what conditions they can and cannot impose on employees. For example, employees do have to notify employers of their absence and that it is caused by sickness but employers are restricted in the rules they can impose about how this is done. Employers cannot insist that employees tell them earlier than the first qualifying day of the period of incapacity for work or by a specific time on that day.

Employers should give some thought to how to create a workplace culture that incentivises attendance without penalising the genuinely sick. The attitude and behaviour of managers will be key to this.

Do you have a good occupational health provider? If not, consider how to obtain occupational health advice in the future. You may wish to be more proactive about considering applicants’ health records before offering employment. This of course comes with the usual caveats about being careful to avoid disability discrimination claims.

SSP is not a glamorous right but it should not be overlooked amidst the upcoming blizzard of employment changes; preparing properly will be key to avoiding catching cold.

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