Statutory Sick Pay Payable From First Day of Absence

Why It Matters

Employers now must fund SSP from day one, increasing payroll costs and forcing tighter absence management, a critical pressure point for SMEs and low‑margin businesses.

Key Takeaways

• SSP will be payable from day one of sickness.
• Eligibility threshold removed; all employees qualify regardless of earnings.
• Weekly SSP rate rises to £123.25 or 80% of earnings.
• Small firms face higher costs for short‑term absences.
• Update contracts, reporting and self‑certification to manage new liability.

Summary

The episode focuses on the upcoming overhaul of statutory sick pay (SSP) under the Employment Rights Act, taking effect on 6 April 2026. The reforms eliminate the three‑day waiting period and the £125‑per‑week earnings test, extending SSP entitlement to every employee from the first day of illness. Key changes include raising the weekly SSP rate to £123.25 and capping it at 80 % of an employee’s average earnings, whichever is lower. Employers will now bear the full cost of SSP, as the previous ability to reclaim payments from the government has been removed. This shift disproportionately impacts small and marginal‑profit businesses, especially those with zero‑hour or low‑guaranteed‑hour contracts. Allison cites a scenario where a worker with only one qualifying day per week could receive a full week’s SSP for a single day’s absence, highlighting the need for precise calculation based on qualifying days. She also stresses that many employers mistakenly assume the change won’t affect them, underscoring the importance of revising contracts, defining qualifying days, and tightening sickness‑reporting procedures. The practical takeaway for employers is to audit and update sickness policies, enforce telephone reporting, implement self‑certification forms, and monitor short‑term absences closely. Failure to adapt could erode cash flow and operational capacity, particularly for firms operating on thin margins.

Original Description

Changes under the Employment Rights Act 2025 from 06 April 2026

In this episode 261 of the employment law and HR podcast, I bring you all the details about the changes with the rules about payment of statutory sick pay which come into effect from the 6th April 2026.

In this episode we cover:

The current rules about the payment for employees who are off sick.

The cost to employers of statutory sick pay (SSP).

Why many employers will be unaware of the change and impact.

The types of business or organisation that will be most impacted by the change.

Why having robust systems in place for the management of sickness absence is more important than ever.

Why qualifying days of employment are important.

How much you have to pay if someone is absent for 1 or 2 days out of their working week.

The weekly flat rate of SSP from 6th April 2026 will be £123.25.

Key takeaway:

Employers need to start taking action now to understand the additional cost and to factor this in to costs planning for the new financial year.

Employers also need to proactively manage short term sickness absence.

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