In a recent Acas survey, employers and workers were asked which three changes to the Employment Rights Act 2025 will have the biggest impact on their work.
Surprisingly, new rights to Statutory Sick Pay (SSP) top the list for both groups, named by 43% of employers and 36% of employees. Reducing the eligibility period for unfair dismissal from two years to six months was the second most important change (31% of employers and 30% of employees). Employers listed the new rights to the first day of maternity leave as the third biggest change, while workers said it was easier to access flexible working arrangements.
The SSP changes take effect from 6 April 2026, aimed at improving financial security, especially for part-time workers and those on low incomes. While many workers will be eligible for SSP, employers will face increased costs and compliance requirements, especially for small and medium-sized businesses.
Before looking at the changes and what employers can do to prepare, let’s consider current arrangements.
What is the current framework of SSP?
An employee must be an “eligible employee” and earn at least the Minimum Wage Limit (LEL), which is currently £125 per week. Even if employees are eligible, SSP is only paid from the fourth consecutive day of illness, as the first three days are unpaid waiting days.
It is estimated that around 1.3 million workers receive no SSP at all, and many only lose pay for short periods of time when they are ill. Others are faced with the choice of working sick or losing wages. This can spread sickness in the workplace and reduce productivity.
What changes from 6 April 2026?
About 25% of workers only receive SSP (rather than contractual sick pay), and the SSP changes below will have a significant impact.
- Removal of the Minimum Wage Limit, and workers will no longer need to meet the LEL to qualify for SSP.
- The new wage-linked figure and SSP will be paid at 80% of normal weekly earnings (NWE) unless the minimum SSP rate is lower.
- SSP will be paid from the first day of sickness absence, as the Employment Rights Act 2025 abolishes the three unpaid waiting days.
- SSP will increase from £118.75 to £123.25 per week on 6 April 2026.
It is important to mention atypical workers, such as zero hours and agency workers, as well as seasonal workers and irregular hours. Establishing NWE is not always easy due to their fluctuating income and flexible work patterns. Employers can determine NWE, for example, by measuring pay over the past 8-12 weeks or by following appropriate contractual arrangements to ensure that the SSP reflects actual income patterns.
What do the SSP changes mean for employers?
The scope of SSP rights is widening. Along with administrative adjustments to review payroll policies and procedures, the changes carry costs that affect organizations of all sizes.
The government estimates that removing waiting days and ending the LEL, combined with introducing 80% wage-linked calculation, will increase employer SSP costs by around £450 million a year. Although a significant sum, it equates to around £15 more per job according to the government’s impact assessment. At worst, early access to SSP may increase productivity by allowing workers to stay home when they are unwell without feeling compelled to go to work.
Employer concerns about increased sickness absence can be reduced through improved sickness management. This includes conducting prompt return-to-work consultations, even after short periods of illness, which can help identify underlying problems early and reduce avoidable absences. It may also involve structured return-to-work planning, phased rehabilitation, and temporary rehabilitation.
How can employers prepare for the changes?
- Review payment systems for SSP linked to salary and starting day entitlement.
- Review and revise sick leave policies, contracts and employee handbooks and communicate these changes to employees.
- Additional SSP budget.
- Identify the roles or departments most affected by the broader eligibility rules.
- Train management and HR for the new system.
- Strengthen sickness absence management procedures.
- Find out the number of casual workers and how their weekly earnings are calculated.
The conclusion
The April 2026 SSP changes represent a major change in the UK’s approach to sick pay, increasing access and improving financial protection for workers. While these changes introduce additional costs and compliance requirements for employers, early preparation will support a compliant and well-managed transition.
By reviewing plans and policies now, organizations can ensure they are ready for the new SSP regime and equipped to support employees and manage sickness absence effectively.
