The Employment Rights Act 2025 introduces a significant reform to Statutory Sick Pay (SSP), materially changing the UK sick pay framework from 6 April 2026. The new rules expand eligibility and make SSP payable earlier during sickness absence, with a direct impact on employers’ costs and absence management processes.
Key changes from 6 April 2026
Removal of the Lower Earnings Limit
Currently, employees must earn above the Lower Earnings Limit (LEL) in order to qualify for SSP.
Under the reform, this requirement will be removed, meaning that all otherwise eligible workers will be entitled to SSP regardless of their level of earnings.
Abolition of waiting days
Under the current system, SSP is payable only after three waiting days.
From 6 April 2026, SSP will instead be payable from the first full day of sickness absence.
New calculation method
SSP will no longer be calculated solely as a flat weekly amount.
Instead, it will be calculated as the lower of:
- 80% of the employee’s average weekly earnings; and
- the statutory weekly cap.
This means that:
- some workers who were previously ineligible will now receive SSP;
- others may receive an amount linked to their earnings, subject to the statutory cap.
Transitional provisions
For sickness absences that begin before 6 April 2026 and continue beyond that date, transitional rules will apply.
Employers will need to:
- verify the relevant reference period for calculating average weekly earnings;
- update payroll systems;
- ensure the correct treatment of linked periods of absence.
Operational impact for employers
The reform significantly expands employers’ financial obligations. Short absences that previously did not result in SSP payments, due to waiting days or low earnings, will now have immediate cost implications.
Managing absence: a more structured approach
In light of the new framework, employers should:
- implement clear absence reporting procedures;
- monitor data to identify patterns or recurring absences;
- conduct return-to-work interviews;
- apply consistent and well-documented criteria where internal policy thresholds are reached.
In cases of frequent or long-term absence, a dismissal on capability grounds may, in principle, be fair, provided that a fair, reasonable and well-documented process is followed.
Particular care is required under the Equality Act 2010, where an employee’s condition may amount to a disability, triggering the obligation to consider reasonable adjustments.
Prevention and workplace culture
The SSP reform also reflects a broader policy direction: greater financial protection during illness and greater organisational responsibility for employers.
To mitigate risk and cost, employers may:
- invest in employee wellbeing programmes;
- strengthen employee support initiatives;
- train managers on absence management;
- review enhanced sick pay schemes.
Conclusion
The Employment Rights Act 2025 marks a significant shift in the UK sick pay framework. Making SSP payable from day one and removing the earnings threshold creates new obligations for employers, requiring updates to policies, procedures and payroll systems.
Early preparation will be key to ensuring compliance and organisational sustainability.