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Under the Employment Rights Act 2025, significant reforms to Statutory Sick Pay (SSP) are scheduled to come in from April 2026. These changes are the most significant reforms to the UK’s sick pay system in many years. The changes are set to impact both employers and employees, so early preparation is essential to ensure a smooth transition and compliance with the law.

What is the current position?

• Under the current legislation, SSP is only payable from the fourth qualifying day of sickness absence
• Employees are also required to earn at least £123 per week in order to qualify for SSP. As a result, around 1.3 million low paid workers are not currently eligible for SSP
• The current provisions therefore often force employees to work whilst unwell, due to the financial implications of being off sick. This can result in the increased spread of illnesses, and can result in lower productivity for the business

What is changing as of 06 April 2026?

There are two key changes being effected in respect of statutory sick pay, as follows:

• Day one right – Statutory sick pay will become a ‘day one right’. From 06 April 2026, the three-day waiting requirement will be abolished, and SSP will be payable from the first day of sickness absence
• The lower earnings threshold – The lower earnings threshold to become eligible for SSP shall be removed, meaning that all employees will now qualify for SSP, regardless of their income. The changes introduced by the Act mean that the rate of Statutory Sick Pay will be 80% of an employee’s earnings or the current flat rate (which is rising to £123.25), whichever is lower. This introduces a variable element based on actual earnings, rather than the flat rate alone. It is the Government’s view that the 80% rate strikes an appropriate balance between providing financial security to employees who need it, whilst limiting additional costs to businesses

What do these changes mean?

• According to Government statistics, up to 1.3 million employees will now qualify for SSP who didn’t previously due to the lower earnings limit, providing them with a form of financial security during periods of sickness absence
• The changes will give employees immediate access to SSP. This will include those with short-term illnesses who previously may have been unpaid due to the length of their absence
• The changes are set to support employees to take the time off they require to recover by providing stronger financial security, and subsequently reducing the spread of infectious diseases. Employers also stand to benefit from increased productivity
• However, the changes will mean that employers will face increased liability for SSP, which will be more readily accessible

How can employers prepare for the changes?
1. Update Payroll Systems

To prepare, employers must review and update their payroll and HR systems to ensure that they are equipped to apply percentage-based calculations, and process SSP payments from day one of an authorised sickness absence.

2. Review Policies and Contracts

Review employment contracts and staff handbooks/policies to remove references to waiting days and the lower earnings threshold, and to reflect the new legislation.

3. Train Management

Ensure that management/staff who are responsible for authorising and making payments in respect of sickness absence are aware of the new rules, and can communicate these clearly to employees – so that they understand their rights.

4. Maintain Accurate Records

Employers should ensure to keep on top of sickness absence records and payroll calculations, as allegations of incorrect SSP payments could potentially give rise to unlawful deduction of wages claims.

5. Budgeting and Forecasting Costs

Employers may decide to review budgeting and forecasting costs, in view of the April 2026 changes. The Government’s key statistics highlight that the cost of removing waiting days and the lower earnings threshold (with a percentage rate of 80%) to businesses is an additional £450 million annually, which equates to approximately £15 more per employee.

If you have queries or questions in respect of the changes coming into force under the Employment Rights Act 2025, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members.