Strengthen Statutory Sick Pay

Strengthen Statutory Sick Pay By Removing The Lower Earnings Limit and Waiting Days

The Labour government intend to strengthen Statutory Sick Pay (SSP) by removing the ‘lower earnings limit’ and the ‘three waiting days’ before SSP is paid. Meaning all workers will be entitled to SSP from day one of any period of sickness.

Proposed Changes

Lower Earnings Limit

Currently employees have to earn at least the Lower Earnings Limit to be eligible to receive SSP when off work sick. Removing the threshold would mean all workers would be qualify for SSP.

Waiting Days

Employees who qualify for SSP currently receive no pay for the first three days of any absence. The days are known as Waiting Days. Removing the waiting days would mean SSP is payable from the first day of sickness rather the fourth day.

Rate of Payment

The Government have concluded, following consultation (see below) that those earning below the lower earnings limit will be entitled to receive sick pay at 80% of average weekly earnings. This means that all employees will be entitled to the lower of the SSP weekly flat rate or 80% of average earnings as soon as they are off sick from work.

Consideration will also be given to increasing the rate of SSP, currently £116.75 for 28 weeks. The proposal is to make it a ‘fair rate of pay’ this could mean aligning it with the flat rate of statutory maternity pay (currently £184.03 per week) or, if lower, 90% of earnings.

Fact Sheet
The Government have published a Fact Sheet detailing their intentions in this area.

Download Now …

Consultation

The consultation sought views on what the percentage rate should be for those earning less than the LEL. Once agreed the rate will be specified in law. The options for responses were 0 – 100%.

The second question asked ‘why do you think the percentage should be set at this level’.

The consultation closed on Wednesday 4 December 2024.

Government Response To The Consultation

The Government has published its response to its consultation on strengthening statutory sick pay (SSP) under the Employment Rights Bill.

Acknowledging that the rate of SSP would need to be adjusted for those earning less than the LEL, the recent consultation focused on establishing what percentage of earnings should be used to calculate SSP for these workers. In its response, the Government has concluded that the appropriate percentage rate for SSP is 80% of the SSP flat rate, where 80% of an employee’s normal weekly earnings is less than the flat rate.

This will be set in law by an amendment to the Employment Rights Bill which reaches Report stage in the House of Commons next week.

Likely Date of Implementation

Historically the new rates are announced by the Government during February for implementation at the start of the next tax year. So April 2026 would logically be the date for implementation.

Top Tips

These changes would mean increased costs for employers. Check your absence records to see how many days of absence have been ‘waiting days’. I also recommend you check your payroll system will be able to adjust to the new regime when implemented.

This would also present a good opportunity to review your absence policy as a whole to check it is still fit for purpose, specifically absence reporting procedures and any triggers for unsatisfactory absence. Line managers and team leaders will need a refresher on handling short-term absence before the new regime is implemented.

It is not currently clear whether the current self-certification rules would also change if there is a change to the waiting-days regime. Under the current regime, self-certification applies for the first seven days of any sickness absence and medical certificates are issued for absences that exceed seven days.

The European Approach To Sick Pay

The UK has the lowest rate of sick pay in Europe. In January 2023, Ireland introduced sick pay entitlements of 70 per cent of normal pay up to a maximum of €110 (£96.24) a day.

Finland: Workers can claim a sickness allowance nine working days after their illness begins. The employer generally pays the employee’s wages during this waiting period, and many also pay the full salary during the first one or two months. Then, the Social Insurance Institution of Finland picks up the allowance, based on the worker’s average annual income. Total duration of benefit is 300 working days (about a year).

France: pay varies depending on the type of illness and professional status. But the daily allowance is typically 50 per cent of a worker’s wage, capped at €2,885.61 per month, meaning the daily allowance paid cannot exceed €47.43 per day. But when the sick leave exceeds three months, that daily allowance may be reassessed and increased. If the worker’s health condition warrants it, sick leave can last up to three years.

Germany: Workers receive full pay for the first 6 weeks of any absence then workers receive sick pay from the company’s health insurance company with a minimum payment of 70 per cent of their regular salary for up to 78 weeks (1.5 years) over a period of three years for the same illness.

Luxembourg: companies in Luxembourg are required to pay workers on sick leave their full salary for around three months, to be precise, to the end of the calendar month during which the 77th day of incapacity occurs. If the incapacity lasts beyond this period, the health insurance body grants an extension for up to 78 weeks (1.5 years).

Portugal: The longer the sick leave, the better it’s paid. Absences of up to one month are covered at 55 per cent of a worker’s average income, the rate increases to 70 per cent for an illness lasting over three months, and again to 75 per cent for sick leaves of over a year. The maximum benefit is 1,095 days (three years).

Spain: workers receive sick pay for 15 days (starting from the fourth day) at 60 percent of their salary. And in Italy, employees are entitled to receive half of their average daily wage in sick pay for the first 20 days they are off, when it goes up to two thirds once they’ve been off for three weeks.

Sweden: 80 per cent of salary, but it can be higher if there’s a collective agreement and is payable for 364 days, but an extension is possible with pay reducing to 75 per cent.

Employee Handbook Compliance Package

Get the Latest Legislation News and My Top Tips delivered straight to your inbox

Have a question? Let's have a chat and a coffee!

If you found this helpful and you would like to learn more about how I work with owners of small business who want to improve their HR management, please book some time in my diary.

Tap into and share the Kea world!

Don't forget to add Kea to your social networks and when you read an article that you like share it with your network!