Employment Rights Act 2025
Changes to Statutory Sick Pay
What you need to know
Understanding the changes to Statutory Sick Pay
Statutory Sick Pay (SSP) changed from April 2026, in four key ways that employers should plan for:
1) A specific legal change – there are 3 key changes:
- SSP will be payable from day 1 of sickness absence,
- the 3-day waiting period will be removed.
- the Lower Earnings Limit (LEL) will also be removed.
2) The annual SSP rate update – SSP will be calculated as the lower of 80% of average weekly earnings or the flat rate (£123.25)
3) Eligibility changes – employees will be eligible for SSP from day 1 of their sickness absence. Due to the LEL being removed, more employees will be able to receive SSP extending eligibility to lower earners who previously fell outside the scheme..
4) Other changes – including record-keeping, reporting, fit note rules, or interaction with company sick pay policies.
Because SSP affects payroll, absence management, and employee relations, it’s worth reviewing your processes now, especially if you employ people on variable hours, part-time contracts, or seasonal patterns.
How to prepare for the changes
When SSP rules change through new legislation or regulations, the practical impact usually falls into three areas:
- Contract review
- Policy alignment
- Process changes
- Risk management
Here’s what you should focus on:
- Review your contracts – Ensure your employment contracts clearly set out your contractual sick pay terms correctly and the statutory position is updated.
- Policy alignment – your sickness absence policy and any contractual sick pay terms may need updating.
- Process changes– managers need to know what to do on day one of abence, when to request evidence and how to keep notes.
- Risk management – inconsistent handling of sickness can quicly become an employee relations issue (and in some cases a discrimination risk).
How Hill HR can support you
As your outsourced HR partner, we’ll help you manage your sickness absence process. We can provide advice on short term absence, help you manage employees who have been off work for a long time to either return them to work or manage them out of the business.
We can provide advice, guidance, policies and draft letters for you to send – ensuring everything is being done lawfully, correctly and sensitively.
A Practical Checklist for Business Owners
Use this checklist to get ready:
- Confirm what’s changing and when (rate, eligibility, and any legal/process updates).
- Update payroll settings for the new SSP rate and any eligibility rule changes.
- Review your sickness absence policy and any contractual sick pay wording.
- Create a manager one-pager: what to do on day 1, day 7, and when absence becomes long-term.
- Audit worker status where it’s unclear (employee vs worker vs self-employed), as this can affect entitlements.
- Check your templates (return-to-work forms, absence logs, fit note tracking).
- Communicate to staff: a short, factual update and a reminder of reporting rules.
Common pitfalls we see:
- Quoting the wrong SSP rate after the annual update.
- Inconsistent handling of sickness between managers.
- Not documenting absence conversations.
- Confusion between SSP and enhanced/company sick pay.
- Treating repeated short-term absence as “disciplinary” without considering underlying health issues.
Some FAQs on SSP changes
Does the SSP rate change automatically in payroll?
Not always. Many systems require an update or confirmation. It’s best to check settings ahead of the effective date.
If eligibility rules change, do we need to update contracts?
Not necessarily, but you should review your sickness absence policy and any contractual sick pay clauses to ensure they reflect current practice and legal requirements.
Can we ask for a fit note from day one?
Usually, employees can self-certify for a short initial period, and fit notes apply after that. If the rules change, your policy and manager guidance should reflect the updated position.
What if we offer enhanced/company sick pay?
Enhanced sick pay should clearly explain how it interacts with SSP (for example, whether SSP is included within the enhanced payment).
We’re a small business in Worcestershire / the West Midlands — does anything differ locally?
SSP rules are UK-wide, but the impact can be more noticeable in smaller teams. Clear processes, consistent manager handling, and good documentation are key.
