The UK government has proposed significant changes to Statutory Sick Pay (SSP) under the Employment Rights Bill to ensure broader coverage and better financial security for employees. Here’s a summary of the proposals:
What’s Changing?
Removal of the Lower Earnings Limit: Currently, employees must earn at least £123 per week to qualify for SSP. The proposed changes would make SSP accessible to all employees, potentially benefiting up to 1.3 million low-paid workers. The consultation also explores a percentage-based SSP rate for those earning below the standard flat rate (£116.75).
Elimination of Waiting Days: SSP is currently payable from the fourth day of sickness, but the government proposes that it be paid from the first day of absence. This will help ensure immediate financial support for employees, reduce presenteeism (working while sick), and contribute to better health outcomes.
Establishment of a Fair Work Agency: SSP will be enforced under a new single body to ensure compliance and resolve disputes more effectively.
These proposals aim to make SSP more inclusive, help employees recover without financial stress, and enhance productivity by reducing the spread of illness in the workplace.
Impact on Employers
For employers, particularly small businesses, the changes present notable challenges:
Increased Costs: Small and micro businesses may face higher expenses, as the removal of the Lower Earnings Limit and the elimination of the waiting period mean more employees will qualify for SSP, and payments will begin immediately. Since smaller businesses often rely solely on SSP (without enhanced sick pay), these reforms could significantly impact their budgets.
Administrative Adjustments: Employers will need to update payroll systems and procedures to comply with new SSP rules, leading to potential one-off costs for system upgrades and staff training.
Action Points for Employers
Stay Informed: Keep track of the consultation outcomes and potential legislative changes.
Review Internal Policies: Anticipate the impact of SSP changes on your payroll system and adjust accordingly.
Engage in the Consultation: Share your views on the proposed reforms by 4 December 2024 to help shape the final legislation.
The proposed SSP reforms reflect a shift towards a more equitable and supportive approach to sick pay, ensuring that no worker is left behind. Employers should begin preparing for these changes and actively participate in the consultation process. For more details, refer to the consultation page, the SSP factsheet, and the impact assessment.
Additional resources from Your Payroll Team:
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