Consultation on strengthening statutory sick pay

The Government aims to strengthen Statutory Sick Pay (SSP)  by removing two key elements:

• The current waiting period: at present SSP is only available after the waiting period of three days has passed.
• The lower earnings limit: SSP is currently not available to employees earning below £123 per week.

The Employment Rights Bill, which was introduced to Parliament earlier in October 2024, aims to remove the above criteria making a fairer system for both employees and employers.

The waiting period

The consultation proposes that removing the waiting period will:

• Reduce the spread of infectious illnesses and provide better management of sickness in the workplace for employers, overall, reducing sickness rates, allowing adequate recovery and increasing productivity.
• Allow employees with long-term illnesses to manage their illnesses better to prevent worsening of the condition.
• Ensure employees are supported with their health issues and incentivised to remain in their roles, cutting on rehiring costs for employers.

Removing the lower earnings limit

There are currently 1.3 million workers not entitled to SSP in the UK. The Government plans to make SSP available to those earning below the lower earnings limit and the consultation suggests that:

• This will particularly benefit women and young people.
• The removal of the limit will allow lower earners to seek adequate recovery time.

The removal of the lower earnings limit will mean that for some lower earners, SSP will be higher than their average weekly wage. The consultation seeks opinions on introducing a taper to the current SSP rate whereby employees will be entitled to a percentage of their average weekly earnings or SSP depending on which is lower.

Options for the percentage rate

The consultation aims to get feedback on what percentage rate should be applied for individuals earning below the lower earnings limit.

The Government's internal model has given a rate of 60% as the lowest rate that could be applied to ensure no employee is any worse off.  

• Other suggested rates are 70% and 80%.    
• The rate will only be applicable to lower-earning employees.
• Employees above the limit will still be in receipt of the flat rate. 

Impact on business

The Government’s internal models have concluded the following:

• Removal of the waiting period is estimated to cost £36 per employee although a lower percentage rate may mitigate this.
• Current SSP costs to employers are 0.06% of total spending. It is estimated this will increase to 0.09%.
• Small and micro businesses currently pay 60% of SSP costs whilst making up only 47% of the business population.  The changes will create a disproportionate burden for these companies.

Consultation

The consultation closes on 4 December 2024.  Responses can be submitted online, by email or via post.   

Useful guides on this topic

Statutory pay entitlement: directors and other employees
The rules determining entitlement to statutory pay are different for directors, casual/agency workers and certain other employment types. 

National Living Wage rates/National Minimum Wage rates
The National Living Wage rates/National Minimum Wage rates all change annually on the 1st April.  Employers need to ensure that they make the necessary adjustments.  

External links

Department or Business and Trade: Make Work Pay: strengthening statutory sick pay

Government Bill: Employment Rights Bill

1. Which of the following best describes how you are responding to this consultation. Are you responding….?

a. As a member of the public / employee;

b. As or on behalf of an individual business or employing organisation;

c. As or on behalf of an employer/ business representative organisation;

d. As or on behalf of an interested Trade Union, stakeholder, or other representative organisation; or

e. Other (please specify)

2. Thinking about employees earning below the current weekly rate of Statutory Sick Pay (£116.75 per week), what percentage of their average weekly earnings should they receive through the Statutory Sick Pay system?
Number must be between 0 -100

3. Why do you think the percentage rate of earnings should be set to this level? There is no minimum word limit for this question, however we strongly encourage a maximum limit of 500 words. Given the volume of responses expected, submissions exceeding this recommended length may not be read in their entirety