How will the Employment Rights Act change Statutory Sick Pay?

The Employment Rights Act is bringing some of the most sweeping reforms to workers’ rights in years.

One of the many changes that employers need to keep pace with is the way in which Statutory Sick Pay (SSP) is going to be handled from April 2026.

To avoid any complications with payroll or any potential breaches of compliance, you need to know how SSP is changing.

What are the changes to SSP?

Currently, SSP is only awarded after a three-day waiting period.

This will be abolished, meaning that workers will be entitled to SSP from the first day of their illness.

This is designed to ease some of the anxiety around workers taking time away from work to recover from sickness.

However, it also means that employers need to have dynamic record-keeping to ensure they can respond effectively to an employee falling ill.

The Lower Earnings Limit (LEL) that used to be a barrier to qualifying for SSP is going to be removed.

This means that all employees will be eligible for SSP when they are sick.

Previously, you may have overlooked lower-paid and part-time workers as they were unlikely to cross the threshold.

How will the new SSP be calculated?

The way in which SSP is calculated is also changing to mirror the changes to its implementation.

SSP will be paid at the lower of either:

• 80 per cent of the employee’s average weekly earnings
• The prevailing SSP flat rate set by the government

By updating the calculations used, it is hoped that SSP will better reflect employees’ earnings while still maintaining the statutory minimum.

What happens if a worker is already off sick when SSP changes?

It will be important to implement the new SSP from 6 April, meaning that there is a chance that some employees may straddle the old and new SSP considerations.

If this happens, you should know that workers already off sick will be protected from reductions to their SSP payments.

If they are currently serving their waiting days, then this will be ignored as of 6 April.

For instance, if a worker falls ill on 4 April, then their SSP will be payable from 6 April rather than 7 April as it would have been previously.

How can employers prepare for the change?

While the changes are likely to be heralded as a reassurance to employees, especially those who struggle with their health, they do present some challenges for employers.

It is best to proactively update your SSP policies and communicate this with staff ahead of time.

Given the range of changes that the Employment Rights Act is bringing in, this will be a common refrain for 2026 and 2027.

You should ensure that both HR teams and payroll teams are aware of the changes, especially with regard to handling illness that straddles the transition period.

To keep your payroll records up to date, you will need to ensure you provide all sickness absences to the payroll team and ensure you state if the employee is entitled to full pay or SSP.

Despite the changes to SSP, it still cannot be reclaimed from the government in the same way that maternity pay can be.

Our team is on hand to help you get your payroll in order ahead of the changes.

We can ensure that all of the calculations are correct and that you pay the correct rates.

Rather than having to worry about keeping pace with changing guidelines, let us help you so that you can keep focusing on your business.