Statutory Sick Pay (SSP): key points for HR

On the 6th April, UK employment law entered a new phase as the Statutory Sick Pay (SSP) reforms under the Employment Rights Act 2025 officially came into force. The biggest changes to sickness policy in 40 years have massively altered the way employers handle employee sickness absence.

With the three-day waiting period abolished and the Lower Earnings Limit removed, SSP has transformed into a day-one right, accessible to an estimated 1.3 million additional employees. Combined with a brand-new dual-rate calculation system, the administrative burden on payroll and HR teams has skyrocketed overnight.

In this informative guide, we will break down what SSP is, what it means for employers, key processes to implement for protecting your business, and what SSP best practice looks like.

What is Statutory Sick Pay (SSP)?

SSP is the statutory minimum amount of money an employer must pay their employees when they are too unwell to work. This is a protective system that ensures employees will be financially supported during times of prolonged sickness or injury.

SSP is the minimum amount set for employers to pay their employees. The maximum standard flat rate for the 2026/27 tax year is £123.25 per week. It can be paid for up to a maximum of 28 weeks for a single spell of illness. Should employers like to pay more, they are well within their right, but legally, the amount paid must always meet the SSP requirement at the very least.

Due to the Employment Rights Act 2025 reforms coming into place, SSP can now be accessed by more employees than ever and much sooner into their employment than before. It is crucial that sooner rather than later, employers revise and update their employee sickness absence policies to adhere to new legal requirements.

Recent updates to SSP

The implementation of the Employment Rights Act 2025 has made the biggest changes to SSP in a generation. These changes aim to widen the safety net for workers while presenting new operational considerations for employers.

Sick pay from day one

Following the Employment Rights Act 2025, employees are eligible for sick pay from their first day of employment. This removal of minimum service requirements means that workers don’t need to struggle through the first few months of their new job with an illness.

Lower earnings threshold removal

Historically, workers earning below the Lower Earnings Limit (LEL) were entirely locked out of sick pay. Now, an estimated 1.3 million more workers are now entitled to SSP after the removal of the lower earnings threshold.

Pay calculations and earnings link

Statutory Sick Pay is now calculated as whichever number is lower; 80% of an employee’s average weekly earnings or 80% of the statutory weekly rate. Essentially, this makes the system much more fair for those with lower incomes or incomes that vary, such as zero-hour workers or those working for commission. Also, it ensures that these workers do not end up earning more through sick pay than they would through their usual working hours.

Common SSP challenges for employers

Employers are now facing different types of pressures, mainly surrounding factors like compliance and cost management, and both must be considered carefully when reviewing company policy regarding SSP.

Complicated calculations for variable earners

Now that the SSP limit for lower earners has been removed and a dual-rate system has been introduced, the complexities of payroll have increased. Employers can no longer apply a standard rate to every employee. Instead, 80% of an employee’s Average Weekly Earnings (AWE) over an eight-week period must be calculated and then compared to the statutory amount.

For workers who don’t earn a set wage, manual calculations are much more likely to include errors which, in turn, leads to incorrect payments.

Financial and operational frustrations

Under old legislation, short-term absences of a day or two cost businesses nothing in SSP. Now, every day of sickness absence triggers a pro-rata payment. If a business experiences high volumes of short-term absences, all of these costs add up.

But it’s not just finance that these short-term absences affect. Some employers report seeing a spike in sickness absence now that there’s no consequence of losing a day of pay, meaning that teams left on site are experiencing a strain on productivity.

ACAS has highlighted that businesses are seeing an increase in how much they’re spending on sick pay, and the government’s estimates state that costs are averaging out to about £15 per employee.

Premature demands of sickness evidence

Due to a rise in day-one claims of SSP, some managers are reacting in an inappropriate manner by requesting immediate proof of illness from employees despite their legal right to self-certify for seven days.

This can impact employee-manager relationships, damage trust, and even open the door to potential grievance claims from staff.

SSP and absence management best practices

Review your sickness absence policies

This is a great first step to take. Clearly outlining who employees must call, what time in the morning they must call by, and how often to update the business on their absence is a simple but effective starting point when revising your sickness absence policies.

Update your staff handbook

Outdated information can cause unnecessary confusion for staff. It may also lead to consequences for the employer down the line if an employee feels as though they have been misled. Make sure your employee handbook is up to date and makes no reference to three-day waiting periods or any old SSP legislation.

Proactive engagement

Absence management can no longer be left as an afterthought. Employers should establish clear contact protocols from the very first day of an employee’s sickness absence.

Return to work conversations

Implementing a policy that states return to work discussions will be mandatory can work effectively to the benefit of the employer. This allows the employee a chance to safely converse any ongoing concerns with their health while allowing the employer to check in and see if the employee would benefit from any reasonable adjustments.

These meetings also serve as a deterrent from exploiting SSP systems. If employees looking to take advantage of the system know that you’re keeping track of sickness absence and monitoring sickness leave fairly, they will be encouraged to only take sickness leave when necessary.

Specific provisions for disability-related absence

Reasonable adjustments for disabled employees aren’t always physical. They can also be adjustments to absence thresholds, such as, the number of allowed absences before a formal review is triggered.

It’s important for employers to differentiate between disability-related absence and standard sickness absence. Clearly tracking the needs of disabled employees under a separate framework ensures they are not unfairly penalised or restricted by standard sickness absence policies.

Your responsibilities as an employer

Operational responsibilities have changed with the updated SSP regulations, meaning employers have work to do to ensure their workplace remains compliant and up to date.

Updating software and system configuration

Employers should be proactive in bringing any old payroll systems up to date with the new field of legislation.

Now that the Lower Earnings Limit (LEL) has been abolished, systems should not be able to automatically block lower-earning workers from receiving SSP. Updating your software is the first action you should take when revising your business’s approach to Statutory Sick Pay.

Proactive and consistent absence management

Because the three-day unpaid waiting buffer has vanished, monitoring short-term absence must become a standard operational procedure rather than a reactive task. Employers are responsible for outlining clear reporting processes from the very first day of an employee’s sickness.

Line managers must be trained to apply these policies consistently across the entire workforce. Failing to log short-term absences or tracking some employees more strictly than others leaves the business exposed to internal grievances, as well as potential claims of favouritism or discrimination.

Facing the Fair Work Agency

The ultimate operational responsibility for business owners is ensuring total compliance. The Fair Work Agency actively inspects businesses and targets non-compliance far more rapidly than traditional employment tribunals. If an agency inspection reveals that an employer has failed to pay SSP correctly, the consequences are severe.

The agency will issue a formal Notice of Underpayment, forcing the business to pay the back-dated wages to the worker alongside a civil penalty of up to 200% of the underpaid sum, capped at £20,000 per employee. Additionally, the agency has the power to recover its own inspection and enforcement costs directly from the non-compliant business, making a single oversight incredibly costly.

How Sapphire HR can help

A healthy workplace is a more productive one. Employees who can rest at home and recover with no financial forfeit have the ability to return to work happier, healthier, and according to a recent study by the University of Oxford, up to 13% more productive. Equally, when an employer shows that they’re invested in staff well-being and take sick pay seriously, workplace morale is boosted.

Day one sick pay can help to nip long-term illnesses in the bud, as employees don’t experience burnout while trying to work through sickness. As these reforms become standard practice nationwide, we expect to see an overall reduction in absenteeism in the long run.

At Sapphire HR, we specialise in taking the complexity out of employment law. We can help you update your workplace policies, train your line managers to handle absences, and implement user-friendly tools to track compliance effortlessly.

Get in touch with the Sapphire HR team today for a friendly chat about how we can take the stress out of your absence management.