Statutory Sick Pay is changing from April. And it is essential that business owners understand what’s happening so they don’t fall foul of the laws.
From next month, anyone who is unable to work through sickness will be entitled to Statutory Sick Pay (SSP) from the first day of their illness. Currently, they must be ill for three days before receiving SSP and earn on average of at least £123 a week.
The changes from government mean 1.3 million of the lowest paid employees will now receive guaranteed sick pay regardless of wage. It will mean employees will receive either 80% of their average weekly earnings or SSP, whichever is lowest.
At the moment, SSP is £116 per week. But this increases to £118.75 from April 6 2025. Businesses will still be expected to pay SSP to eligible employees for 28 weeks.
What is SSP?
SSP is a legal entitlement in the UK that provides financial support for eligible employees who cannot work due to illness. Employers are responsible for administering SSP payments. These are paid directly to employees during their period of sickness.
Why Statutory Sick Pay is changing
The new policy is part of the government’s Make Work Pay pledge and part of other changes to employment law. It says that the changes are to ensure that employees who are sick do not need to lose a day’s pay.
Liz Kendall, Secretary of State for Work and Pensions, says, “For too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet.
“No one should ever have to choose between their health and earning a living, which is why we are making this landmark change.
“The new rate is good for workers and fair on businesses as part our plan to boost rights and Make Work Pay, while delivering our Plan for Change.”
The affect on business
While some organisations have welcomed the fact that Statutory Sick Pay is changing, worries some businesses.
The British Chambers of Commerce said the 80% rate was a ‘fair compromise’ but warned that allowing sick pay from the first day of illness could lead to higher staff absenteeism.
Deputy Director of Public Policy, Jane Gratton, said: “Employers often struggle to find shift cover at short notice, leading to disruption for customers.
“The government’s impact assessment did not produce compelling evidence on the day-one rights issue, so there may yet be unforeseen consequences.”
She added that some small businesses could struggle to cope with higher costs if absenteeism increases.
How to manage sickness
No one an avoid sickness altogether, but there are ways businesses can put actions in place to reduce sickness.
- Absence policies should be clear about what is expected of employees if they need time off work. They should be consistent and flexible to allow individual circumstances of employees.
- Promote a good work life balance. Encouraging people to speak up if they feel they’re under too much pressure can reduce sickness absence.
- Create the right culture so that employees feel comfortable raising issues and trust these will be taken seriously. This helps employees less likely to stay in work when there are any problems.
- Address any causes of absence. For example, if employees experience work-related stress or struggling to balance work with caring responsibilities. If you can encourage openness and address underlying issues, it should help reduce sickness.
What records you need to keep
Employers should keep accurate documents for employers who claim SSP. This includes:
- Sick leave records. Employers should keep a comprehensive record of sick leave including dates of absence, reasons for illness and documents, such as fit notes or self-certifications. This will help track SSP eligibility and compliance with legal requirements.
- Payment records. Recording SSP payments are essential for auditing purposes and addressing any possible disputes.
- Remember that all records and documents should be kept confidential.
Payment processes
Employers are responsible for calculating the correct amount of SSP. Failing to pay the correct sum could lead to HMRC investigations. Non-compliance can lead to penalties, which will mean you incur additional costs.
Employers should be aware of any deductions that might apply to SSP, including NICs. These deductions must comply with current tax laws.
Payments are typically made in line with your payroll schedule and they should be integrated into your payroll system to ensure processing payments are timely.
Do you need help?
If you need help understanding SSP payments following the changes, you can contact our team today or fill in the form below.
