The biggest shake-up to statutory sick pay in a generation lands on 6 April, and for small employers already stretched by rising costs, the changes demand immediate attention.
From that date, the three unpaid “waiting days” that have been a feature of the SSP system for decades will be abolished. Staff who fall ill will be entitled to statutory sick pay from their first day of absence rather than their fourth, a shift that the government says will benefit around 1.3 million additional workers but which business groups warn will land squarely on the shoulders of small firms.
The weekly SSP rate itself rises modestly, from £118.75 to £123.25. But the real sting for smaller employers lies in the structural changes. The lower earnings limit, the threshold below which workers were previously ineligible for SSP, is being scrapped altogether. In its place, a new formula will calculate SSP at 80 per cent of average weekly earnings, or the flat rate, whichever is lower. That means part-time staff, casual workers and those on lower hours who were previously outside the system will now qualify.
The government’s own impact assessment puts the additional cost to employers at roughly £450 million a year across the economy. For a small business employing a dozen people, even a handful of extra short-term absences paid from day one can make a noticeable dent in the monthly wage bill, particularly in sectors such as hospitality, retail and care where sickness absence rates tend to run higher.
HR advisers are urging small firms to review their absence policies now rather than scramble in April. Businesses that currently offer enhanced company sick pay from day one may already absorb SSP within their existing schemes, but those relying on the waiting-day buffer to manage costs will feel the difference immediately.
Payroll systems will also need updating. Any firm still running manual calculations or older software should check with their provider that the new rates and rules are reflected before the first April pay run.
There is a practical wrinkle for absences that straddle the changeover date, too. The government has published transitional guidance confirming that where a period of sickness began before 6 April but continues beyond it, the old rules, including waiting days, will still apply for that particular absence.
For many small employers, this is not simply a payroll tweak. It is a prompt to look again at how absence is managed, how return-to-work conversations are handled, and whether occupational health support could reduce the frequency and length of sickness spells. The firms that treat this as a compliance exercise alone may find themselves absorbing costs that smarter absence management could mitigate.
