UK Employment Insights: All Workers to Receive Sick Pay Following Changes to Employment Law

Génevie Kuiper-Isaacson, Senior Associate

Génevie Kuiper-Isaacson is a tri-qualified lawyer specialising in employment law. She started her career in South Africa, where she ran her own firm, before moving to a prominent commercial firm in London. She has extensive experience advising both employees and employers in relation to a wide range of matters, including unfair dismissal, sex discrimination, pregnancy/ maternity discrimination, disability discrimination, race discrimination, TUPE, whistleblowing, grievance and disciplinary process, settlement negotiations, redundancies, enforcement and defence of restrictive covenants and corporate advisory and training.

Over a million low-paid workers will be entitled to receive 80% of their weekly salary as sick pay from the first day of illness under new measures due to be announced shortly by the UK government. The announcement comes as part of the Employment Rights Bill, which is expected to be laid before Parliament today (4 March). Secretary of state for work and pensions Liz Kendall has described the proposals as a “landmark change” to employment laws.

The bill seeks to strengthen protections for workers and employees throughout Britain and will introduce new rules on everything from flexible working to unpaid parental leave. However, many of the proposed changes to employment law will not come into force until next year.

Changes to Statutory Sick Pay (SSP) in brief

Statutory Sick Pay (SSP) is the minimum payment employees are entitled to receive when they are too ill to work. Under the current framework, workers must earn at least £123 a week on average before they are eligible for SSP and are only able to claim sick pay from the fourth consecutive day of absence through sickness. The proposed changes will strengthen workers’ rights by increasing the basic rate of SSP, making sick pay available to all UK workers (by removing earnings-based qualification), and making SSP payable from the first day of sickness.

The existing framework

• Only workers earning more than £123 a week qualify for sick pay
• Workers must have been ill for three consecutive days before they can claim sick pay
• Qualifying workers are entitled to £116.75 per week (rising to £118.75 in April)

The proposed changes

• All workers will be entitled to sick pay
• Workers can claim sick pay from day one of their absence from work due to illness
• Workers will be entitled to 80% of their weekly earnings while sick

While the reforms are a welcome change, the announcement also comes as a sobering reminder that we live in a country where over a million people cannot afford to be sick.

For employers

Obviously, employers should expect to pay more in SSP once the proposed changes come into effect. The government estimates that 0.06% of the total UK wage bill is currently spent on sick pay. This is expected to rise to 0.09% with the proposed reforms. While this is a 50% increase, it still means UK businesses will be spending less than a tenth of a percent of their total wage bill on sickness cover. Of course, employers will also need to plan for greater flexibility in their work rotas to cover any increase in the number of sick days taken.

The government has said that its reforms will reduce the overall rate of absence through sickness and increase productivity by allowing employees to recover from illnesses more quickly. The British Chambers of Commerce has accepted the proposed 80% rate, which Liz Kendall has described as “good for workers and fair on businesses”, as a “fair compromise”.