Statutory Sick Pay Scheme changes: how can employers prepare for such changes?

Written by Jordan Masters and

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The Statutory Sick Pay (“SSP”) scheme entitles eligible employees who are absent from work due to incapacity and who meet three qualifying conditions to receive a weekly SSP payment for up to 28 weeks in any period of incapacity for work (or linked periods of incapacity). SSP is payable by employers.

The government has recently changed the Statutory Sick Pay provisions; it is anticipated that such changes will ‘help people to stay in work and grow the economy’. The government also expects that more than one million working people across the UK will see a rise in living standards. The changes come about with the government’s aim to boost workers’ rights and create a more healthy and productive workforce.

The trigger for this has been that, unfortunately, the UK has seen a slow-down in productivity in recent years which has been more severe than other nations. It is hoped that the changes will ensure that more people become eligible for SSP and workers suffering from financial hardship when they become unwell is avoided.

The current regime

Broadly, to be able to claim SSP, individuals must:

  • Be an employee and have worked for their employer;
  • Earn at least £125 per week (the “Lower Earnings Limit”); and
  • Have been unwell for four or more days in a row (including weekends and holidays).

To receive SSP, employees must provide the appropriate notification to their employer and submit evidence of incapacity, i.e. Fit note, etc.

From 6 April 2025, the rate of SSP increased to £118.75 per week (up from £116.75 per week), in line with inflation.

What are the changes?

The Employment Rights Bill (“ERB”) is set to bring about major reform of the statutory scheme so that:

  • The first qualifying condition, that a period of incapacity for work must arise for an employer to be liable to pay SSP for a day of incapacity, is removed;
  • The Lower Earnings Limit will be abolished in relation to SSP, so an employee’s earnings will not act as a bar to that employee claiming SSP;
  • The rate of SSP will be the lower of 80% of an employee’s weekly earnings or £118.75 per week; and
  • Employees will be entitled to claim SSP from their first full day of sickness, rather than their fourth day.

It is also intended that the ‘Fair Work Agency’, a body which is to be created, will bring together existing state enforcement functions in relation to a wide range of employment rights, including SSP.

The potential implications

It seems that there are two sides of the coin to the aforementioned reforms.

The government’s position appears to be that, by enabling employees to claim SSP from their first day of sickness, employers will benefit from increased productivity, as employees will not feel compelled to go into work when they are ill and potentially spread disease to other employees, which could lead to worse long-term health outcomes and lower productivity for businesses.

On the other hand, these reforms make SSP more accessible, potentially encouraging more employees to take sick leave and claim SSP, which represents a cost to businesses; in particular, more lower-income employees, part-time employees and employees on zero-hour contracts will be able to claim SSP. The government concedes that the additional cost to businesses of the SSP reforms is approximately £15 per employee (‘Factsheet: Statutory Sick Pay (SSP)’).

In addition to this, some businesses, particularly small and medium-sized ones, may struggle with the additional costs, as SSP cannot be claimed back by employers (unlike other forms of statutory pay).

How can employers best prepare for the changes?

There are several actions which employers should consider taking in order to prepare for the changes to the SSP scheme, which are as follows:

  • Businesses should incorporate the changes into their strategic plans and budgets;
  • Employers should prepare to implement the necessary updates to their payroll systems, to ensure that the correct rate of SSP is paid to all eligible employees, and to ensure that employees are paid SSP when they should be; and
  • Employers should review, and if necessary, amend, their sickness/absence policies to ensure that they align and are compliant with the new law.

Clarkslegal’s experienced employment team can advise on the current and pending SSP schemes, and can draft tailored sick pay and leave policies. Please do not hesitate to get in touch.

If you also want to keep up-to-date with the ongoing Employment Rights Bill changes, please listen to our podcast series here.

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