Employment Rights Bill - Statutory Sick Pay

Croner discusses the Government's intention to change existing laws that regulate statutory pay. New pledges will aim to give workers falling below the Lower Earnings Limit access to Statutory Sick Pay (SSP).

• How does the Government intend to change the existing Statutory Sick Pay framework?
• What is the fair work agency?
• What this all means for employers
• Quick recap
• How can Croner help?

The Employment Rights Bill is an important part of the UK Government's plan to Make Work Pay. It will make changes to existing laws to:

• Improve worker rights.
• Create a more equitable economy.
• Increase job security and living standards.

The Bill aims to amend current laws that regulate Statutory Sick Pay (SSP), and who is entitled to SSP.

In this article, Croner will unpack these proposed changes, explaining what they mean for employers. Let's start by evaluating current SSP laws and regulations to get a sense for the upcoming changes.

Need Employment Rights Bill support? Avoid employment tribunals by speaking to Croner’s employment law and HR experts.

We can help you understand what the Bill means for your business, and how to update your contracts and documentation in advance.

Simply call 01455 858 132.

What is the existing Statutory Sick Pay (SSP) framework? 

According to Gov.uk, an employee is only eligible for statutory sick pay if they:

• Are an official employee.
• Take in average weekly earnings of £125.
• Have taken sick leave for more than three days in a row.

Currently, eligible employees are entitled to SSP from the fourth day in a row of absence due to ill health. It is worth noting that:

• Employers can only request a fit note after the seventh consecutive day of sickness
• Employees can self-certify their illness if they have been off work for less than seven days

It is worth noting that, as it currently stands, 1.3 million UK individuals are not eligible for SSP. As a result, low paid workers who are not fit for work still undertake employment. This increases the spread illness and disease, worsening long-term absences, and reduces productivity. 

How does the Government intend to change the existing Statutory Sick Pay (SSP) framework? 

Firstly, the Government intends to remove the Lower Earnings Limit (LEL). This is the minimum amount employees need to earn to qualify for Statutory Sick Pay (£125 in average weekly earnings).

As such, all low wage workers will be given the lower of either:

• 80% of their weekly earnings.
• The statutory rate (currently set at £118.75).

These changes will come into effect in April 2026. It is likely that the statutory rate will increase during this period as well.

Remember, removing the LEL will mean the 1.3 million individuals mentioned earlier will become eligible to claim SSP.

Secondly, the Government is planning to repeal the three-day waiting period. This means workers will be SSP-eligible from day one of their absence.

Overall, these changes aim to:

• Support employees through illness, allowing them to take the time they need to recover.
• Provide the protection of financial security.
• Reduce the spread of infectious diseases.
• Improve workplace productivity.

What is the fair work agency?

It is worth noting that new statutory sick pay changes will be enforceable by the single enforcement body. People widely know this body as The Fair Work Agency (FWA). 

The FWA will be a government-sanctioned body with the power to independently investigate employment law transgressions. In other words, the FWA will be able to levy action against employers and business owners who do not comply/abide by the law.

This action includes, but is not limited to:

• The ability to inspect workplaces and demand that employers produce relevant documentation to demonstrate compliance.
• The ability to issue Notices of Underpayment that require a settlement of any outstanding monies (in cases where employers have underpaid/not paid their workers statutory payments due to them).
• The ability to issue Labour Market Enforcement Orders that require employers to correct their behaviour immediately.

What this all means for employers

These changes require all UK employers to understand the following:

1. Organisations employing low wage workers will be liable for Statutory Paybligations/payments.
2. Following the changes, organisations will need to ensure their employment contracts and documentation are up to date. Note that the FWA can demand to inspect them for compliance purposes.
3. For organisations that do not comply, the FWA will have legal recourse to demand settlement of outstanding statutory payments/monies. The FWA will give notice of required settlements, giving employers a timeframe to pay in or face further action.

Quick recap

• Firstly, the Government is proposing to remove the Lower Earnings Limit, to ensure that statutory sick pay is available to all workers no matter what their weekly earning is. This will ensure that all workers, including those who earn less than the existing LEL, will be given a rate that is either 80% of their earnings, or a flat rate, currently set at £118.75 - whichever is lower.
• Secondly, the Government intends to remove the waiting period for the statutory sick pay system and amend the period of incapacity for work. This will ensure eligible employees are entitled to statutory sick pay from day one of absence. 
• Lastly, the Fair Work Agency will be able to bring legal proceedings against employers who fail to comply with new employment laws and legislation.

How can Croner help?

If you’re asking yourself, "how do I prepare for the new statutory sick pay requirements?", or "what documentation updates are required?", then let Croner’s experts help you!

Our advisors are on hand 24/7 to help support and advise you through these changes. For free, same-day support, call us on 01455 858 132.