Employment Rights Act and Statutory Sick Pay

Imminent Sick Pay Overhaul

The UK's Employment Rights Act 2025, which gained Royal Assent on December 18, 2025, introduces phased reforms to employment law, with Statutory Sick Pay (SSP) changes arriving on April 6, 2026. Currently, SSP kicks in only after three unpaid waiting days and requires employees to earn above a lower earnings limit (around £129 per week in 2026). These barriers are being scrapped.

SSP will now be payable from the first full day of sickness absence, and all employees qualify irrespective of income. For many, especially lower earners, payment will be the lower of the flat rate (£123.25 per week from April 2026) or 80% of average weekly earnings. This extends protection to up to 1.3 million low-paid workers previously ineligible and eliminates the incentive to delay sick leave until the fourth day.

The impact falls heavily on labor-intensive sectors such as adult social care, where part-time, low-hour contracts are common and staff often earn near or below thresholds. Many care workers were excluded from SSP before; now providers must cover absences from day one, potentially for frequent short spells given the physically demanding and illness-exposed work. With social care already strained by staffing shortages, funding shortfalls, and high turnover, these added payroll costs—without corresponding government offsets—risk squeezing margins further or prompting service cuts.

Less discussed is the trade-off in payment levels: for very low earners, the new percentage-based calculation could yield less than the old flat rate, though coverage itself expands significantly. Businesses worry about moral hazard with easier short-term claims, while supporters argue it curbs presenteeism, limits disease transmission in care settings, and supports recovery. The timing—mere weeks before implementation—leaves employers little buffer to adjust policies, budgets, or insurance.

Overall, these changes form part of a broader worker-protection push but arrive amid economic pressures, testing how well sectors like care can absorb them without wider fallout.