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Sick pay shake-up | Enhanced 80% SSP and an end to waiting days
Written by Chloe Kamutikaoma on 19 March 2025
In a significant move towards improving workers’ rights, the UK government has announced two major changes to sick leave and pay, as part of its plans to create a healthier, more productive workforce.
The government had already announced plans to make statutory sick pay (SSP) more accessible as part of its Plan to Make Work Pay. Now, a further change announced on 5 March 2025 promises to have a profound impact on sick pay as we currently know it, particularly for lower-paid workers.
Here’s what employers need to know.
Change 1: Sick pay from day one
Currently, SSP in the UK is subject to certain limitations, most notably a three-day waiting period before payments commence. In other words, employees are only entitled to SSP from the fourth consecutive day of absence.
As a result, those who take occasional sick days – one day here, two days there – lose income, potentially leaving them vulnerable to financial strain during brief periods of illnesses.
To address these gaps, the government is proposing to introduce day one sick pay, ensuring employees receive financial support from the first day of illness. This would ensure workers are not left without support during short bouts of sickness, and prevent them from feeling pressured to work while unwell due to concerns over lost income.
This change will be especially relevant to those in lower-wage sectors or part-time roles, where the financial impact of sickness can be particularly difficult.
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Change 2: 80% sick pay for lower-paid workers
One of the most crucial changes Labour is proposing is the introduction of a new SSP rate of 80% of earnings for employees who earn below a specified income threshold.
This marks a substantial increase from the existing flat rate of SSP (currently set at £116.75 per week), which many have argued is inadequate, particularly for lower-wage workers.
The intention behind the change is to help alleviate financial pressure for those most vulnerable to illness-related income loss, especially in sectors where low wages are prevalent.
When this change comes into effect, it could benefit up to 1.3 million low-paid workers, who will receive either 80% of their average weekly earnings or SSP (£118.75 per week from 1 April 2025), whichever is lower, when they fall ill.
For some of the UK’s lowest earners, the changes could mean an extra £100 per week compared to the current system.
What does this mean for employers?
For employers, these shifts present both challenges and, arguably, opportunities. While the proposed regulations would inevitably lead to increased costs for businesses – especially those that rely on lower-paid, temporary, or part-time staff – they also have the potential to create a more loyal and motivated workforce.
By offering workers greater security and support surrounding sickness, employers can improve employee morale, reduce absenteeism, and look to foster a workplace culture based on fairness and care.
However, some employers may be concerned that the new benefits could encourage abuse of sickness absence in the workforce, as the current SSP provisions are, to an extent, a deterrent to taking sporadic sick days as employees will not get paid. It’s possible that the government may look to include provisions within the legislation to prevent this – but we’ll have to wait and see.
So what should employers do now?
Given concerns that this change could cause an increase in non-genuine absences, organisations should ensure they have a robust absence management policy in place, with clear triggers for formal action if absences exceed a reasonable level.
In addition, employers should:
- Consider providing training for managers on how to address absences effectively;
- Implement an absence management system to monitor absences and highlight absence issues; and
- Ensure return to work meetings are undertaken and documented.
These actions will help to manage and address spurious absences as well as those that may be genuine but are having a detrimental impact, both financially and on business performance.
While larger companies may have more flexibility to absorb the financial impact of enhanced and extended SSP eligibility, for smaller businesses, this could prove to be more of a financial burden. It’s therefore imperative to start tackling these issues now, especially if you already have repeat offenders whose absences haven’t yet been managed.
It remains to be seen how these proposed reforms may evolve in the coming months; however, this change is just one of many included in the Employment Rights Bill, which reflects the government’s broader focus on improving workplace fairness across the UK.
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With significant changes to SSP on the horizon, it’s crucial for employers to be proactive. WorkNest’s Employment Law and HR experts can provide expert advice, draft clear absence policies, deliver expert-led manager training, and implement effective absence management systems – helping you keep sickness absences under control and manage these issues confidently and compliantly.
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