Imminent changes to Statutory Sick Pay: What employers need to know
Reforms to Statutory Sick Pay (SSP) from 6 April 2026, will enable more employees to qualify for it but there will be increased costs and compliance requirements for employers, particularly small and medium-sized enterprises.
SSP will undergo major reform from 6 April 2026 under the Employment Rights Act 2025. The changes aim to improve financial security for employees. For many organisations, the question is becoming increasingly pressing: how will these reforms affect us, and what should we be doing now to prepare?
Interestingly, Acas recently published the results of its survey where employers and employees were asked which three of the changes in the Employment Rights Act 2025 would have the biggest impact in their workplace. Topping the list for both groups were the new rights on SSP (43% for employers and 36% for employees) followed by the new protections on unfair dismissal (31% and 30%).
So, what is the current SSP framework and what changes are ahead?
Current SSP Framework
An employee must be an “eligible employee” and earn at least the Lower Earnings Limit (LEL), which is currently £125 per week.
Even where employees qualify, SSP is only payable from the fourth consecutive day of sickness. The first three days remain unpaid waiting days.
As a result, around 1.3 million low‑paid employees receive no SSP at all and many employees lose pay when unwell for only short periods.
The Government acknowledges that the current system leaves significant gaps in support. Many employees, particularly those in part-time or low‑paid roles, face the choice between working while ill or losing income. This creates clear risks, including the spread of illness in the workplace and reduced productivity.
The Employment Rights Act 2025 seeks to remedy this by removing key eligibility barriers and ensuring financial support from day one of sickness absence.
What is changing from 6 April 2026?
The key changes to SSP are as follows:
- Removal of the Lower Earnings Limit and employees will no longer need to meet the LEL to qualify for SSP.
- A new earnings‑linked calculation will apply whereby SSP will be paid at 80% of normal weekly earnings, unless the statutory flat rate is lower.
- The flat rate of SSP will increase from £118.75 to £123.25 per week on 6 April 2026.
- SSP will be payable from day one of sickness absence because the Employment Rights Act 2025 Act abolishes the three unpaid waiting days.
These changes will have a significant impact for the approximately 25% of employees who only receive SSP (rather than contractual sick pay) ensuring they no longer lose income during short‑term illnesses.
What these reforms mean for employers
The changes will significantly widen SSP entitlement. Beyond the administrative adjustments required to update policies and payroll processes, the reforms carry a cost implication for organisations of all sizes.
The Government estimates that removing waiting days and abolishing the LEL, combined with introducing the 80% earnings‑linked calculation, will increase employer SSP costs by around £450 million per year. This is a significant sum but this equates to roughly £15 more per employee according to the Government’s impact assessment. Crucially, earlier access to SSP may boost productivity because when employees no longer feel compelled to attend work while unwell, there may be fewer prolonged absences and reduced transmission of illness within teams.
Employer concerns around increased sickness absence could also be mitigated through strengthened sickness management. This includes conducting return‑to‑work interviews promptly, even after short periods of illness, which can help to identify underlying issues early and reduce avoidable absences.
Atypical workers
As mentioned above, the new earnings‑linked calculation will apply and SSP will be paid at 80% of normal weekly earnings (NWE) unless the statutory flat rate is lower. Establishing NWE for atypical workers is not always straightforward. Such workers include zero‑hours, agency, seasonal, term‑time and irregular‑hours staff and they require particular attention due to fluctuating pay and variable working patterns.
For workers with fluctuating pay, employers may determine NWE by:
- Averaging pay over the previous 8-12 weeks;
- Applying existing methods used for holiday‑pay averaging; or
- Following relevant contractual provisions.
This ensures SSP reflects actual earning patterns.
Qualifying days (QDs)remain central to SSP administration. Although waiting days are abolished from 6 April 2026, SSP is still only payable on QDs, and they continue to determine both:
- Which days SSP is payable; and
- The daily rate, calculated by dividing the weekly amount by the number of QDs.
This makes correct identification of QDs especially important for workers with irregular or inconsistent schedules. The law sets out a hierarchy:
- Agreed working days – those expressly agreed between employer and employee.
- Contractual working days – days the contract states the employee may or will be required to work.
- Wednesday only – the statutory default where working days cannot be determined.
- All days except those when no one works – used in limited, specific operational structures.
Errors often occur with working out SSP for atypical workers. Employers should therefore clearly document QDs in contracts or written agreements and keep rotas and timesheets as supporting evidence. They should also regularly review QDs where working patterns change.
How can employers prepare for the changes?
Employers should consider the following:
Systems and processes
- Updating payroll systems for earnings‑linked SSP and day‑one entitlement.
- Reviewing and updating sickness absence policies, contracts and handbooks.
Financial planning
- Budgeting for increased SSP.
- Identifying roles or departments most affected by the wider eligibility rules.
People management
- Training managers and HR on the new regime.
- Strengthening absence management processes.
- Communicating the changes to employees in advance.
Conclusion
The April 2026 SSP reforms represent a major shift in the UK’s approach to sick pay, with expanded access and enhanced financial protection for employees. While these changes introduce additional costs and compliance requirements for employers, early preparation will support a compliant and well‑managed transition.
By reviewing systems and policies now, organisations can ensure they are ready for the new regime and equipped to support their workforce and manage sickness absence effectively.
In our recent article about the Mayfield review one of the recommendations was that employers should be proactive in managing sickness absence and facilitating a return to work. Measures include structured return-to work planning involving both the employee and manager, phased returns, temporary adjustments and open communication.
Finally, regarding the Acas survey, Acas says that the findings will help it target its support for employers and employees. Acas will be updating its advice and training but we do not know at this time whether any changes are planned to the Acas guidance on SSP.
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