Statutory Sick Pay Reform Compliance Check

The Employment Rights Act 2025 makes two major changes to Statutory Sick Pay (SSP). First, it scraps the three “waiting days” — SSP will be payable from the very first day of sickness absence rather than the fourth qualifying day, as has been the rule for decades. Second, it removes the lower earnings limit (currently £125 a week), which previously excluded roughly two million lower-paid workers from SSP altogether. Under the reformed system, anyone who is too ill to work qualifies from day one, with those earning below the current threshold receiving the lower of the standard flat rate or 80% of their average weekly earnings. For employers, this changes the cost and administration of every short sickness absence, not just long-term cases. Payroll systems, absence policies and staff handbooks that reference “day four” payment or an earnings threshold will be out of date and need updating. Businesses that rely heavily on part-time, casual or lower-paid staff — retail, hospitality, care and cleaning are typical examples — will see the biggest change in exposure, since many of those workers previously fell below the earnings limit and received no SSP at all. Getting absence reporting and payroll processes ready before the change commences reduces the risk of underpaying staff or triggering employment tribunal claims for unlawful deductions from wages.

This check reviews your sick pay policy, payroll process and absence reporting against the Employment Rights Act 2025 reforms to Statutory Sick Pay — covering day-one payment and the removal of the lower earnings limit.