By Alicia Collinson
From 6 April 2026, significant reforms to Statutory Sick Pay will take effect under the Employment Rights Act 2025.
The changes are designed to strengthen financial protection for workers during illness. However, they will also increase employer cost exposure and require careful operational planning.
Here is what is changing and what it may mean in practice.
What Is Changing?
From 6 April 2026:
- SSP will be payable from day one of sickness absence.
The previous three unpaid waiting days will be removed.
- The Lower Earnings Limit will be abolished.
Employees will no longer need to earn above a minimum threshold to qualify.
- SSP will be calculated as the lower of:
– 80 percent of average weekly earnings
– The statutory SSP rate
More employees will qualify, and payments will begin earlier. Payroll systems must be updated accordingly.
What Will This Cost Employers?
This is the question many organisations are asking.
There are two main areas of increased cost exposure.
- Paying SSP for Short Term Absences
Under the previous system, the first three days of sickness were unpaid waiting days.
From April 2026, even a one day or two day absence will trigger SSP liability.
For employers with high volumes of short term absence, this could represent a measurable increase in payroll costs across the year.
- Extending SSP to Lower Paid Employees
The removal of the Lower Earnings Limit means employees who were previously not entitled to SSP will now qualify.
For organisations with part time, casual or lower paid workers, this may significantly increase the number of employees eligible for statutory sick pay.
To calculate your increased costs, employers should model:
- The number of short term absences per year
- The proportion of the workforce currently below the Lower Earnings Limit
- The potential additional SSP liability under the new rules
Forward planning now will avoid financial surprises in 2026.
Will This Increase Absence Levels?
Some employers are concerned that removing unpaid waiting days may reduce the financial deterrent to short term absence; are people more likely to take time off if short absences are no longer unpaid?
Ultimately, the impact will depend on:
- Workplace culture
- Absence management processes
- Manager confidence and capability
- Clear communication of expectations
Employers who already manage attendance consistently and fairly are unlikely to see dramatic behavioural change. Organisations with unclear or poorly managed absence processes, however, may find that the financial impact exposes weaknesses that were already there. The reform does not create risk on its own, but it can amplify existing management issues.
Legal Risk Has Also Increased
Incorrect SSP payments may result in:
- Unlawful deduction of wages claims
- Tribunal proceedings
- Reputational damage
This is no longer just an administrative payroll update.
Managers must understand when SSP is triggered and how entitlement is calculated; getting it wrong, or telling someone they might not be paid, when they will, could be discriminatory in certain circumstances.
What Employers Should Do Now
- Review payroll systems to ensure day one payments are implemented
- Update SSP calculation processes to reflect the 80 percent earnings rule
- Identify employees who will newly qualify
- Audit short term absence data to assess potential cost impact
- Update sickness absence policies and manager guidance
- Train managers on consistent and lawful absence management
Early preparation will reduce both financial and legal risk.
Need Support?
If you need support modelling potential the cost impact, reviewing SSP processes, or updating absence policies ahead of April 2026, our team at Thrive Law can help. Email enquiries@thrivelaw.co.uk
Proactive preparation now will place your organisation in a far stronger position when the reforms take effect.
