The Employment Rights Bill, first mentioned in October 2024 as part of the Government’s plan to “make work pay”, has now become law.   As a result, there will be various significant changes to existing employment legislation made over the next 2 years with one of the first significant changes taking place in April 2026, in relation to Statutory Sick Pay (SSP).

For many businesses, SSP is already a familiar part of payroll administration. However, the upcoming changes will mark a notable shift in both eligibility and cost, and Advo would recommend that employers should begin preparing now.

SSP sets the minimum legal standard for sick pay in UK workplaces. Employees (including part timers, agency workers and some zero hour contract individuals dependent on their working status) are eligible to receive SSP if they meet certain qualifying conditions and it is here that we will see the changes occur.

Currently, individuals are not eligible for SSP until they have been absent for at least 3 “waiting” days. They must earn above £125 per week and will receive a statutory amount of SSP.  Employers bear the full cost of SSP which is administered through their payroll systems. There is little flexibility over how it is calculated and is subject to statutory rules.

From April 2026, SSP will become a day one right. This means the current three waiting days will disappear, and employees will be entitled to sick pay from the very first day they are off sick.

Alongside this, the earnings threshold will be removed. This will widen eligibility considerably, meaning many more workers, including those on lower wages or irregular hours will qualify for SSP for the first time.

The way SSP is calculated will also change. Rather than relying solely on a flat weekly rate, SSP will instead be paid at either the statutory flat rate or 80% of the employee’s average earnings, whichever is lower.

Although these changes are designed to strengthen employee protections, they are likely to increase costs for employers.

With Statutory Sick Pay due to become payable from day one, businesses may see more short-term absences, making effective absence management more important than ever.

For SMEs, even small increases in sickness absence can have a noticeable impact on cost, productivity and day-to-day operations. Strong absence management, combined with up-to-date policies, will be one of the most effective ways for SMEs to control rising sickness costs under the new rules.

Having clear and consistent processes in place can help reduce unnecessary absenteeism while still supporting employees fairly. This includes ensuring sickness reporting procedures are understood by all employees, holding return-to-work conversations after every single period of sickness absence, and monitoring patterns of repeated short-term sickness.

Training managers to handle absence confidently and lawfully, alongside supporting wellbeing and early intervention, can also help prevent absence escalating into persistent short term absence or longer-term issues.

Advo would recommend that all existing HR policies, such as your Absence Management policy, are updated to reflect the new SSP arrangements.

Employers should also take this opportunity to review their sickness pay arrangements, including any company sick pay schemes, to ensure contracts, policies and payroll practices remain accurate and aligned with the new legislation going forward.

Errors with SSP can lead to underpayments, grievances, HMRC queries and, in some cases, if the sickness absence is poorly managed, there may risk of litigation and an Employment Tribunal claim.

At Advo, our HR Consultants and Payroll Advisors can support you in preparing for these changes. This can be from updating absence and sickness policies, to reviewing company sick pay schemes, training managers, and ensuring payroll systems are ready for the new calculations. We are here to help you manage the transition smoothly and keep sickness absence costs under control.

An article by Sam Brown, Advo HR Consultant.