Statutory Sick Pay from Day One: Exploring the Latest Proposals

In the UK, the entitlement to statutory sick pay (SSP) has long been a critical aspect of employees’ rights, offering financial support when they are unwell and unable to work. Historically, employees had to be off work for at least four days before qualifying for SSP, leaving many vulnerable workers without immediate financial support. However, recent legislative proposals put forward a significant shift towards granting SSP from the first day of sickness.

This blog explores the current legal framework for SSP and examines how the proposed changes could impact both employees and employers.

The Current Framework for Statutory Sick Pay

Under existing legislation, statutory sick pay is a benefit provided to employees who are too ill to work for more than three consecutive days. The current SSP rate is £116.75 per week, which can be paid for up to 28 weeks, depending on the severity and duration of the illness. Importantly, SSP is available only after the employee has been off work for four days, with the first three days being unpaid — known as “waiting days”.

For an employee to qualify for SSP, they must:

Be classified as an employee with an employment contract.

Earn an average of at least £123 per week.

Have informed their employer of their illness within the required timeframe (often within seven days).

Provide proof of illness (after seven consecutive days of sickness).

Employees do not qualify for SSP if they already receive statutory maternity pay, have exhausted their 28 weeks of SSP entitlement, or are involved in a trade dispute.

Current Sick Pay Limitations and Challenges

The “waiting days” provision has long been seen as problematic, particularly for lower-paid or part-time workers who may not have savings or other forms of financial support during those initial unpaid days. Additionally, employees on zero-hours contracts, gig workers, and others in insecure employment often find themselves ineligible for SSP, further limiting its utility for some of the most vulnerable workers.

Employers, on the other hand, bear the cost of SSP payments, which adds financial strain to businesses, particularly SMEs, during periods of high sickness absence or pandemics like COVID-19.

Proposed Changes: Day-One Entitlement to Statutory Sick Pay

Labour’s Employment Rights Bill, which was introduced into Parliament on 10 October 24 as part of the new Labour government’s broader plans to reform UK employment legislation, seeks to remove the SSP lower earnings limit and the three-day waiting period, which would be a monumental shift in employee rights, effectively ensuring financial support for all workers from the onset of illness without needing a waiting period.

The critical points of the proposed changes are:

Employees would no longer have to wait for four consecutive sick days to receive SSP. Instead, they would be eligible from day one of their illness.

In another significant reform, the proposed changes might remove the earnings threshold for SSP entitlement, allowing part-time and low-income workers to qualify for SSP without having to meet the £123 weekly earnings minimum.

By removing the waiting period, employees can avoid the financial distress associated with short-term illness. This protection is particularly important in sectors where sick pay beyond SSP is rare, such as hospitality, retail, and gig economy roles.

How Will the Proposed Sick Pay Changes Impact Employees?

For employees, these proposed changes represent a crucial step towards greater financial security and fairness in the workplace. One of the most significant advantages would be providing workers with financial relief from the very first day of illness, preventing them from choosing between their health and their livelihood. This provision is likely to be particularly beneficial for those with chronic health conditions or recurring short-term illnesses, as they will no longer face the financial burden of losing pay during each absence.

Additionally, removing the lower earnings limit would extend SSP to more workers, including part-time employees and those on variable hours contracts, providing broader coverage for workers often excluded from these benefits under the current system.

Employer Considerations: Adapting to New Rules

While the proposed changes to SSP entitlement are designed to benefit workers, should they come into effect, they will also place additional responsibilities and potential financial burdens on employers. Businesses, particularly smaller enterprises, may need to re-evaluate their sick leave policies and ensure they are financially prepared for the possibility of increased SSP claims. This shift may require better planning around workforce management and absence monitoring.

Employers will need to stay informed about the specifics of these changes should they be formalised into law, ensuring they remain compliant with any updated requirements. Failure to do so could lead to employment tribunal claims, which can be both costly and damaging to an organisation’s reputation.

Another consideration for employers is the potential impact on workplace culture. Removing waiting days may encourage some employees to take sick leave more readily, which could increase absence rates. To manage this, businesses might need to invest in more robust absence management policies or explore options for occupational health support.

Looking Ahead: The Future of Statutory Sick Pay

The proposed changes to statutory sick pay entitlement reflect a growing recognition of the need for greater employee protections in the modern UK labour market. With increasing pressure on employees to balance health and financial obligations, the ability to access sick pay from day one of illness could significantly improve workers’ well-being, particularly those in lower-paid or insecure employment.

However, employers must prepare for the associated challenges, such as potential cost increases and administrative burdens. Offering clear communication, updated policies, and potential adjustments to occupational health strategies will be key to navigating these changes smoothly.

The shift towards statutory sick pay from day one would represent a significant development in employment law, offering employees enhanced protections and greater financial security. While this would undoubtedly benefit the workforce, employers must take proactive steps to ensure they are ready to comply with these new regulations if approved.

For expert guidance on how these changes might affect your business or your rights as an employee, contact our team of employment law specialists today.