If you have been keeping half an eye on the upcoming changes under the Employment Rights Act, you will know that Statutory Sick Pay, or SSP, is getting a significant overhaul. And yes, we know. When legislation changes, it can feel like one more responsibility added to a list that was already long enough.
The good news is that, while there are important changes to prepare for, there is plenty of time to get organised. We believe it will all be worth it as the reforms aim to give employees greater financial security, reduce productivity loss caused by people working when they’re unwell, and help create generally healthier, more productive workplaces.
At vivoHR, we focus on practical, commercially minded HR support, so let’s break this down even further in simple terms.
What is changing to statutory sick pay?
Under the Employment Rights Act, the following statutory sick pay measures have been introduced:
- The Lower Earnings Limit is being removed, meaning statutory sick pay will be available to all employees regardless of their weekly earnings.
- SSP will be paid at 80 percent of an employee’s earnings or the current flat rate, whichever is lower.
- Waiting days are being removed, so eligible employees will receive SSP from their first full day of sickness absence rather than the fourth.
- SSP enforcement, including disputes and compliance, will move into a newly established single enforcement body, the Fair Work Agency.
These changes affect both eligibility and the point at which SSP becomes payable.
When do these changes come into force?
The removal of the Lower Earnings Limit and the waiting period are expected to come into force on 6th April 2026.
That gives employers time to prepare. In reality, however, updating payroll processes, reviewing policies and adjusting budgets always takes longer than expected, particularly when you are running a business at the same time.
How is this different from the current SSP system?
At present:
- An employee must earn at least the Lower Earnings Limit, which is currently £125 per week, to qualify.
- SSP is only payable from the fourth consecutive working day of sickness absence. The first three days are unpaid waiting days.
- Anyone earning below the lower earnings limit receives nothing in SSP.
As a result, up to 1.3 million low paid workers are not eligible for SSP and no employee currently receives SSP for absences shorter than four days.
This has meant some individuals have felt financially pressured to work while unwell, which can increase the spread of illness and reduce productivity across teams.
What will SSP look like from 6 April 2026?
From 6th April 2026, the requirement to earn at or above the Lower Earnings Limit will be removed. The lowest paid employees will now qualify for SSP where they previously did not.
For employees earning below the previous threshold, SSP will be calculated as:
- 80 percent of normal weekly earnings or
- the current flat weekly SSP rate (whichever is lower)
From the same date, waiting days will be removed. SSP will be paid from the first full day of sickness absence instead of day four, helping employees manage those first few days off work without losing income.
What does the move to the Fair Work Agency mean?
Statutory Sick Pay, including enforcement and disputes, will sit within the newly established Fair Work Agency. In practical terms, SSP compliance becomes part of a broader employment rights enforcement framework. Accurate payroll processes and clear record keeping will be increasingly important.
What is the cost to businesses?
We will not pretend cost is not part of the conversation.
The impact assessment estimates that removing waiting days and the Lower Earnings Limit, using an 80 percent rate, will cost businesses an additional £450 million annually. That equates to around £15 more per employee per year. For some organisations, that figure will feel manageable. For others, particularly smaller businesses, it will need to be planned for.
The Government has said the changes could help productivity by reducing people coming into work unwell. From our experience, when employees feel able to take the time they need to recover, they usually come back focused and ready to get on with the job – which is far better than having half the team sniffling their way through the week!
When we talk to business owners about these changes, a few practical questions keep coming up. So here are some of the key points in plain English:
- Will anyone receive less SSP under the new system?
The removal of waiting days means no employees will receive less SSP for the first three weeks of a sickness absence. Even those who may receive a lower weekly amount under the 80 percent calculation are more likely to be better off overall because payment begins from day one.
- Why has the rate been set at 80 percent?
Following a public consultation last year, the Government considers 80 percent to strike the right balance between providing financial security for employees and limiting additional costs for businesses.
- What about small businesses?
The Government states that removing waiting days may improve productivity, while the estimated additional cost is around £15 per employee.
- What should business owners be doing now?
Now is the time to review your sick pay policy and make any changes to enhance your processes so that they include employees completing self certificates and return to work meetings, and update any contract clauses. You will also need to ensure payroll systems can calculate 80 percent of earnings correctly and factor projected costs into budgets. Managers should understand the new day one entitlement so it is handled consistently.
Although April 2026 may seem some way off, it will come around quickly, and this is ultimately about making sure your policies, payroll and processes are compliant before the changes take effect. Getting ahead of it now reduces the risk of errors, disputes or last minute adjustments once the new rules are in force.
The Employment Rights Act introduces several changes beyond SSP. For a full overview, you can explore our dedicated Employment Rights Act page here: https://vivohr.co.uk/employment-Rights-Act-2025/ There is also a free downloadable checklist available to help employers prepare for the upcoming changes.
Final thoughts from vivoHR:
Yes, SSP reform requires planning.
Yes, there are cost considerations.
But it also offers an opportunity to strengthen processes, support your workforce and future proof your business.
If you would like straightforward, commercially focused HR advice on how these changes affect your organisation, vivoHR is here to help you prepare with clarity and confidence.
