Statutory Sick Pay Is Changing: What It Means for Your Absence Management

Statutory Sick Pay has sat in the background of most small business HR conversations for years — a figure you know you need to pay, a process you hope you don't need to use too often.

The Employment Rights Act changes that picture. The SSP reforms are more significant than many business owners realise, and they have direct implications for how you handle absence across your team.

What's Changing?

Two headline changes:

The lower earnings limit is being removed. Currently, employees need to earn at least £123 per week (the lower earnings limit) to qualify for SSP. Under the ERA reforms, this threshold is going. More of your employees — including those on lower pay, shorter hours, or variable contracts — will qualify for SSP.

The three waiting days are changing. Currently, SSP doesn't kick in until the fourth day of sickness absence — the first three days are known as 'waiting days.' The government is reforming this so that SSP is payable from day one of absence.

Together, these two changes mean that more people will qualify, and you'll be paying SSP sooner. For businesses where absence is already a cost and a management challenge, this is worth planning for.

What Does This Mean in Practice?

A few things change operationally:

• Your payroll processes need to reflect the new rules — particularly around when SSP starts and who's eligible

• Your absence reporting process needs to be consistent and applied from day one of absence — not just from day four

• Employees on variable or zero-hours contracts need to be assessed for SSP eligibility more carefully

• Your sickness absence records need to be accurate and up to date — because SSP calculations depend on them

The Bigger Picture: Absence as a People Management Challenge

SSP is the floor, not the ceiling. How you manage absence — the conversations you have, the support you offer, the processes you follow — determines whether absence is a persistent drain on your business or something that's handled effectively.

The businesses that handle absence well share a few characteristics:

• A clear absence reporting procedure that everyone understands

• Consistent return-to-work conversations after every period of absence, however brief

• A genuine willingness to explore what's behind patterns of absence — rather than just counting days

• Documented conversations so that patterns are visible and any support or intervention is on record

The ERA changes make absence management more pressing, not less. The businesses that already have these habits in place will find the transition straightforward. Those that don't will find themselves managing more complexity with less foundation to stand on.

A Note on Enhanced Sick Pay

Some employers offer enhanced sick pay above the statutory minimum — particularly as a way of attracting and retaining staff. The ERA changes don't directly affect your obligations around enhanced schemes, but they do raise the floor for everyone.

If you've been considering whether to introduce an enhanced absence policy, now is a good time to look at what's competitive in your sector and what you can afford — alongside reviewing whether your current scheme is fit for purpose.

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Need help with this?

If you'd like support getting your HR foundations right — contracts, policies, processes, or anything people-related — The People Consultancy is here to help.

We work with growing businesses across West Sussex and beyond, providing practical, straightforward HR support that fits your size and budget.

Get in touch: hello@thepeopleconsultancy.uk | 01243 256610